Investors hold steady pre-BoE meet.
Wednesday 5 August, 2020
Daily Currency UpdateGBP - British PoundThe UK had a muted trading session on Tuesday, as investors hold steady before the Bank of England meet on Thursday. With little UK fundamental data in the market this week, the pound began to slip following on from rumours that Johnson may once again force London and Manchester into stricter lockdown, in order to combat the potential COVID-19 infection rate surge. After GBP's best month in over a decade, this week's BoE meet should do little to slow the rally down. After Barnier’s positive Brexit talk, we could witness another 5-6% surge by the end of the year.
Key MoversThe US Dollar found itself on the back foot once more, as COVID-19 continues to plague the country. It is now widely accepted that the Fed must better their stimulus response to the virus and pledge to aid the population through the exit plan, once infection rates have fallen off. The Dollar will likely weaken further, as it’s safe haven status seems to be in question from investors, who look to other assets to plant their money. Across the pond, the Euro is absolutely flying, due to their envelope pledge. EUR/USD has broken levels not seen since 2018 and analysts are predicting that 1.20+ is certainly possible in the short term. The USD remains the king however and investors only need the slightest evidence to pile back, which may come in better-than-expected employment data this Friday. The Aussie Dollar and Kiwi have also been quietly rallying over the past few weeks, as they reach pre-lockdown highs. With the expectation of a few localised lockdowns, both nations handled the virus extremely well, with business returning to normal. The rallying will likely continue while the world aims to catch up and follow suit.
- GBP/USD: 1.3000 - 1.3165 ▲
- GBP/EUR: 1.0995 - 1.1170 ▼
- GBP/AUD: 1.8120 - 1.8280 ▼
- GBP/CAD: 1.7285 - 1.7490 ▼