The majors have been trading in a tight range for some time now and there has been little sterling movement of note over the past week. Yesterday did produce a rally of around 0.5% in early sessions versus the US dollar, due mostly to renewed risk appetite.
However, in initial trading today sterling has slipped back below the 1.23 mark.
The pound was also boosted by a report that the European Union is willing to shift its stance on fisheries in Brexit trade negotiations, due to be completed by the end of the year, though this had little impact on sterling against the euro.
The government this week laid out plans to ease the UK’s coronavirus lockdown status, including restrictions on retail, if government tests are met. It was also acknowledged that this would be difficult and challenging.
There is continued speculation that the Bank of England may yet adopt negative interest rates, although the Bank of England’s chief economist said it was not yet remotely close to any decision to take interest rates below zero.
It is a very light week for UK economic data releases, with nothing of note.
GBPUSD opened at 1.2287 and rose to 1.2359, closing at 1.2336
GBPEUR opened at 1.1227 and closed at 1.1231
The US dollar has continued to shift largely in reaction to risk appetite, which has been on and off frequently in the current climate.
Yesterday, following a UK public holiday on Monday, the greenback softened by 0.5% as riskier assets were pursued in the wake of encouraging lockdown news. However, once again this morning concerns have been raised, this time over the US response to China’s proposed security law for Hong Kong. As a result, the dollar has regained most of yesterday’s losses.
Tomorrow sees the release of preliminary quarterly GDP figures Stateside.
In the eurozone, investors wait for the European Commission to release details of a financial rescue fund for the bloc. Later today, the EU is to present its own proposal for a coronavirus recovery fund, after a Franco-German proposal for a 500 billion euro fund ran into opposition.
The single currency continues to trade with little marked deviations.
EURUSD opened at 1.0971 and closed at 1.0984
