The pound had a bumpy ride yesterday, gaining 0.3% versus the US dollar in early afternoon trading, before losing its advantage and ending the day 0.4% down on its opening position. Against the euro, sterling peaked 0.5% higher, before paring those gains by the close.
There have been encouraging Brexit signals this week, with both the UK and EU agreeing to ramp up the intensity of ongoing negotiations to try and get a deal done before deadlines run out.
Yesterday saw the UK unemployment rate unexpectedly hold at 3.9% over the three months to April, as businesses utilised the government’s job retention scheme to keep employees on their books during a record decline in economic output. However, the number claiming benefits rose more than expected.
In a quiet day economically, investors will be anticipating tomorrow’s Bank of England policy meeting, when it is expected to announce a fresh increase to its stimulus package.
GBPUSD opened at 1.2643, peaking at 1.2673 before closing down at 1.2596
GBPEUR opened at 1.1155 and reached 1.1219 before closing at 1.1167
The US dollar enjoyed an afternoon bounce yesterday following the release of better-than-expected retail sales data. The month on month figure came in 10% greater than market forecasts and immediately bolstered the greenback. However, the optimism was dampened somewhat later in the day, as Fed Chairman Powell painted a pessimistic picture of the economy in his testimony to the Senate committee, while also reinforcing hopes for continued policy support. Powell’s testimony is ongoing this evening amid no economic data releases today.
The euro suffered on Tuesday at the hands of both the dollar and pound, losing 0.8% versus the buck in afternoon trading.
Aside from Brexit output it is a very quiet week for the single currency, being pushed and pulled by its peers.
EURUSD opened at 1.1338 and fell by the close to 1.1259