Sterling inched lower versus its US counterpart as markets await news of more restrictions and lockdown measures in an effort to halt the resurgence of the Coronavirus in the UK.
It is expected that the Prime Minister will make an announcement later today after holding an emergency meeting of the COBRA committee followed by a Parliamentary address. The local lockdowns are expected to include gyms, casinos, bars, and bookmakers in those areas deemed more critical. Analysts say that the measures are likely to further slow the country’s economic growth which was at its slowest pace ever in August. On the plus side, there is optimism that the Brexit negotiations will continue to push through and that a deal will be hammered out before the looming deadline of October 15th.
In London, as of 10:54 am, the GBP/USD was trading lower at $1.3022, a loss of 0.21%, and moving off the session trough of $1.30081. The EUR/GBP was lower at 0.9063 Pence, down 0.0232%; the pair has ranged from a low of 0.90483 Pence to a high of 0.90861 Pence. The GBP/JPY was lower at 137.409 Yen, down 0.2787%, well off the high for the trading session which was recorded at 183.030 Yen.
Following a speech from the Bank of England’s Governor, it looks to be a quiet day from a fundamental standpoint. Tomorrow, markets will focus on UK labor data to be issued by the UK’s Office of National Statistics. According to the latest poll, the ONS is likely to report that the ILO Unemployment Rate will have moved higher to 4.3% in August from the previous 4.1%. Average earnings for the three-month period through August are predicted to have improved marginally; the forecasts are calling for 0.6% for wages without a bonus and -0.5% for wages including a bonus (from 0.2% and -1%, respectively). Analysts say that if the data is worse than the forecasts, support for the Pound is likely to further erode.