Pound Supported by Optimism – 21 July 2020

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Sentiment shifted towards the positive.

BOEThe GBP/USD pair briefly edged above a key level during London trade on Tuesday, pushing higher by an agreement from the European Union on a much-needed recovery fund, as well as optimism that a vaccine for the Coronavirus may have been found. The news was enough to shift sentiment toward the positive, despite the absence of progress in the Brexit talks and the latest economic data from the UK which was generally poor. An assessment from the chief economist of the Bank of England that was more bullish than previously is also helping to provide support for the Pound Sterling.

As of 11:15 am in London, the GBP/USD was trading higher at $1.2690, a gain of 0.2924% and edging off the session peak of $1.27167. The EUR/GBP was trading at 0.9025 Pence, a loss of 0.1659%; the pair has ranged from a trough of 0.90088 Pence to a high of 0.90498 Pence. The GBP/JPY was higher at 136.084 Yen, up 0.2903%, and off the session peak of 136.456 Yen.

The minutes of the last policy meeting for the Reserve Bank of Australia was released earlier today. After, the chairman of the RBA, Philip Lowe, said in a speech that the country’s unemployment situation has turned a corner given the latest job figures which showed both an increase in the numbers of employed but hours worked. Moreover, he pointed out that the central bank, in conjunction with the Australian government, will continue to provide support so that any shocks to income can be mitigated. The Chairman cautioned that there will still likely to be bumps ahead given that certain sectors were now faced with constraints even as other sectors are returning. The Aussie Dollar was higher on the news, with the AUD/USD trading at $0.7064, a gain of 0.7069%.

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