Pound Makes Headway Against Rivals – 09 July 2020

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On Wednesday Rishi Sunak pledged 30 billion more in aid to hopefully jump-start the economy which has been hard hit in the fallout of the Coronavirus.

Bank of EnglandThe Pound Sterling made headway against its US rival after the finance minister announced his plans to provide a boost to the struggling economy. Analysts say that the risks surrounding the Brexit transition are still keeping investors on edge and weighing on the Pound. On Wednesday Rishi Sunak pledged 30 billion more in aid to hopefully jump-start the economy which has been hard hit in the fallout of the Coronavirus. The government will offer bonuses in an attempt to bring furloughed employees back, it also lowered the VAT for the UK’s hospitality sector and has put a moratorium on property taxes for home purchases below a specific threshold. According to currency strategists, FX traders still seem to be considering the implications of these plans.

As of 11:49 am in London trade, the GBP/USD was higher at $1.2640, a gain of 0.2308%, and off the session peak of $1.26676. The EUR/GBP was lower at 0.8959 Pence, a loss of 0.2338%; the pair has traded within a band from a low of 0.89457 Pence to 0.90011 Pence.

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Later today, markets will be eyeing the release of labor data out of the US. The resurgence of the Coronavirus in a number of states which had lifted quarantine and distancing restrictions and resulted in surging infection and death rates. In some cases, the local governments have once again initiated lockdown plans which could mean that those recently re-employed are once again out of work. The latest polls suggest that initial jobless claims will hit 1.375 million, a slight decline from the previous week while continuing claims will see a marginal fall to 18.95 million (from 19.29 million).

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