Pound Sentiment Improves on Fiscal Plans – 13 July 2020

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Sentiment has been improved by the recent announcements by government officials that substantial fiscal stimulus would be forthcoming.

EnglandThe Pound Sterling saw some positive momentum during the London trade on Monday with the GBP/USD coming close to the pair’s 200-day moving average which was set at $1.27. Against the common currency Euro, the Pound was somewhat lackluster but still trending toward the GBP/EUR’s 55-day moving average which was set at 89.30 Pence. Sentiment has been improved by the recent announcements by government officials that substantial fiscal stimulus would be forthcoming. That effectively helped to attract investors’ attention which pushed the Pound about 2% higher thus far in July, making the Pound the second-best performer of all major currencies for the month.

As of 11:18 am in London, the GBP/USD was trading at $1.2609, down 0.0808%, and off the session peak of $1.26670. The EUR/GBP was trading higher at 0.8982 Pence, a gain of 0.3553%; the pair has ranged from a low of 0.89353 Pence to a high of 0.89857 Pence in today’s session. The GBP/JPY was trading higher at 135.037 Yen, up 0.0652%, off the session peak of 135.438 Yen.

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With a quiet day ahead in terms of fundamental input, markets will look to a pair of speeches from the Governor of the Bank of England which will take place today. Beyond that, a slew of data will be released tomorrow by the Office of National Statistics, the most relevant of those will be GDP for the month of May, which economists are predicting will be at 5% on a month-over-month basis, significantly improved from the -20.4% of the previous reading. Also out tomorrow will be May’s Manufacturing and Industrial Production which is being forecast with readings of -20.9 and 6%, respectively, both on a month-over-month basis.

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