Daily Currency Update

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Sterling lower after coronavirus flare-up

GBP - British Pound

Sterling fell yesterday, testing 1.0900 versus the euro and 1.2250 against the US dollar. The headlines continue to sway between Brexit and the coronavirus. Yesterday it was the Coronavirus that held the headlines as the death toll reached a staggering 500,000 globally, with over 10 million confirmed cases. Local concerns saw Leicester make the news as a flare-up means a stringent lockdown will be imposed on the English city, which has already accounted for 10% of all positive cases in England. This comes as a blow to the UK and Prime Minister Boris Johnson who is due to see further easing measures on the 4th July due to the progress made in tackling the virus. Monday lows were seen around 4pm in the afternoon with a slight recovery overnight. GBP/USD sits just under 1.2300 at the time of writing and GBP/EUR has just touched 1.0950.

Macroeconomic data is thin on the ground again today, with no UK or European data releases expected. US data comes in the form of business and consumer confidence numbers from the Chicago PMI and CB consumer confidence, and we also see Federal chair Jerome Powell testifying alongside treasury secretary Steven Mnuchin before the house financial services committee in Washington DC. This will likely be scrutinised by investors and traders alike as the US tries to balance its way out of the current pandemic.

Key Movers

US and Asian markets were both given a boost overnight with local data beating expectation. Firstly we saw US pending home sales spike to a record 44.3% in May compared to April, which is the largest monthly jump in the history of the survey. Overnight, an official survey on China’s vast factory sector showed activity quickened last month, defying expectation for a modest slowdown. Combined these releases offered some light relief to markets which saw local stock exchanges rally, but as the sentiment pendulum swings between hope and concern, pandemic concerns have slipped back into vision. Small gains and losses have been seen against a basket of currencies.

Expected Ranges

GBP/USD: 1.2175 - 1.2330 ▼

GBP/EUR: 1.0900 - 1.0990 ▼

GBP/AUD: 1.7850 - 1.7970 ▼

GBP/NZD: 1.9100 - 1.9220 ▼

GBP/CAD: 1.6670 - 1.6820 ▼