A weaker US Dollar in the overnight hours helped to boost the Pound Sterling which saw continued gains during London trade. What has also gave the Pound some buoyancy was the Prime Minister’s steps to reopen some of the major stores and trading centers in June. According to Mr. Johnson’s plans, car showrooms and outdoor markets are poised to reopen on June 1st, with other retail operations deemed non-essentially able to open mid-month provided they have met the government’s criteria for reopening. The discussion for opening up food and drink establishments is also being discussed, especially because those places tend to encourage patrons to gather and languish.
As of 11:17 am in London, the GBP/USD was trading higher at $1.2317, a gain of 1.0184% and off the session peak of $1.23624. The EUR/GBP was lower at 0.8897 Pence, a loss of 0.413%; the pair has ranged from a low of 0.88957 Pence to a high of 0.89469 Pence.
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Currency strategists say that the Pound is not likely to rise much beyond current limits given that the Brexit negotiations are still at an impasse. Also weighing heavily is the concern that the Coronavirus has still not been well contained, evidenced by the high number of fatalities in the UK. Moreover, worries that the Bank of England has not yet closed the door on the possibility of a negative rate environment is also a key factor. In fact, of all the G10 currencies, the Pound’s performance has been the worst; since the end of April, Sterling has lost nearly 3% of its value relative to the greenback.