Sterling was able to make impressive gains on Tuesday as a drop in COVID-19 cases and a rise in office attendance gave the Pound a much-needed boost. While Prime Minister Boris Johnson reiterated his message that the UK needs to “remain cautious”, the daily number of COVID-19 cases fell for a seventh day in a row. After having just finished self-isolation himself, Johnson said “it’s very important that we don’t allow ourselves to run away with premature conclusions about this… I think everybody understands that this is still a very dangerous disease”.
As global risk sentiment improved, demand for the safe-haven Dollar withered, and the US Dollar Index (DXY) continued to sink. The DXY, which tracks the Dollar’s performance against 6 major rivals (EUR, JPY, GBP, CAD, SEK & CHF), slipped below the 93.00 handle yesterday. Adding to the Dollar’s woes is the increasing pressure exerted on the currency as investors await the latest Fed meeting. Starting at 19:00 GMT today, the US Central Bank are expected to keep interest rates unchanged at the range of 0% and 0.25%.
In regard to economic releases yesterday, while US Consumer Confidence exceeded expectations, Durable Goods disappointed. CB Consumer Confidence was released at 129.1 on Tuesday, despite being forecasted at 123.9. As for June’s Durable Goods Orders, the figure was expected at 2.1%, but the actual reading came in at 0.8%.
GBPUSD started the session at 1.3822 and was able to climb as market conditions improved. Cable finally finished the day at 1.3884.
GBPEUR also had an impressive session – starting the day at 1.1714 the pair went on to close at 1.1740.
EURUSD also capitalized on a weaker Greenback. The pair started Tuesday at 1.1799 and quickly surpassed the 1.18 handle, finishing the day at 1.1825.