In a session of little action on Friday sterling was largely untouched, only making some gains versus the US dollar.
Markets remain on the back foot with the pound, as a purveying lack of clarity both on the UK’s trade relationship with the EU and the Bank of England’s strategy for keeping the economy afloat, sows doubt in the minds of investors and leaves the currency mostly driven by external factors.
Up to now, little has been achieved in UK/EU negotiations on a trade deal. On Friday, rating agency Moody’s said that the UK will suffer the sharpest peak-to-trough economic slump of any major economy this year and will increase national debt as a share of GDP by nearly a quarter. Also on Friday, a survey showed that footfall in shops was much lower than usual so far for June, but this was to be expected.
It’s a quiet week for sterling on the economic calendar and the pound may well remain at the foot of the mountain.
GBPUSD opened at 1.2596, closing at 1.2626
GBPEUR opened at 1.1158 and closed at 1.1173
The US dollar slid on Friday as some risk appetite returned, on hopes of a potential vaccine for the coronavirus. The greenback posted its largest weekly percentage loss against its major rivals in a month.
On Friday, Gilead Sciences stated that additional data from a late-stage study showed its antiviral remdesivir reduced the risk of death and significantly improved the conditions of severely ill virus patients.
The news rallied stocks and pushed the dollar lower and in late afternoon trading, the dollar index fell 0.2% to 96.624.
US producer prices also unexpectedly fell 0.2% in June, following a 0.4% rebound in May
There is a light US calendar until Thursday, when retail sales figures will be eyed with interest.
The euro had an anonymous week, with a dearth of activity meaning that the single currency moved only in response to external drivers. The currency made slight gains against a weaker dollar on Friday, but remained largely flat versus the pound, as it had all week.
Once again, the EU economic calendar is light this week.
EURUSD opened at 1.1289 and closed at 1.1299