- Pound (GBP) is extending gains after Rishi Sunak unveiled a scaled back jobs support programme
- Other rescue measures were included to support businesses
- US Dollar (USD) eases back as hopes of US fiscal stimulus rise
- US durable goods due later
The Pound US Dollar (GBP/USD) exchange rate is edging higher on Friday adding to gains from the previous session. The pair settled on Thursday +0.2% at US$1.2749, after rallying as high as US$1.2772. At 06:15 UTC, GBP/USD trades +0.05% at US$1.2755. Yet despite the rise in the Pound at the end of the week, the pair is on track for -1.2% losses across the week, GBP/USD is still trading down over 4%% so far this month.
British Chancellor Rishi Sunak announced a scaled back job support scheme, to replace the current furlough scheme when it finishes at the end of October. The Chancellor also unveiled plans to extend loan repayments for businesses and to continue the tax cut for the hospitality sector, the sector worst impacted by the coronavirus restrictions. The Chancellor’s rescue package boosted optimism surrounding the UK economy and the Pound.
Unemployment in the UK is 4.1%. It was forecast to reach 7.5% by the end of the year without any additional scheme following the furlough scheme.
The US Dollar eased back on Friday amid renewed hope that US lawmakers will agree a rescue package to aid the US economic recovery. Risk aversion has boosted the US Dollar across the week, however the mood in the market changed late on Thursday as stalled stimulus talks between the US Democrats and Republicans showed signs of progress.
US lawmakers are working on a $2.2 trillion coronavirus stimulus package which could be voted on a soon as next week.
The move has come after the latest US jobless claims data showed that 870,000 Americans signed up for unemployment benefit last week, this was above the 860,000 the week before in a sign that the recovery in the labour market is plateauing.
Durable goods is the only high impacting US data release today.