A net positive performance for Sterling this week, and with net negative economic updates from the U.K. (as well as apparent difficulty with Brexit negotiations), it’s likely the price action in Sterling pairs was mainly influenced by global risk sentiment.
United Kingdom Headlines and Economic data
Mixed start to the week for Sterling against the majors, which suggested that traders continued to mainly focus on the “reopening trade,” supported on Monday with better-than-expected Chinese manufacturing PMI data, rather than the continued U.S.-China tensions (China cuts US ag purchases) & mass U.S. protests over the weekend. GBP outperformed the “safe havens” while under performed against the comdolls.
The divergence in performance between risk currencies and safe havens widened on Tuesday as positive risk sentiment picked up steam, likely on news that China bought U.S. soybeans after halt to U.S. purchases ordered, easing U.S.-China tensions a bit for traders.
Despite the lagging Brexit talks, sterling rose during the U.S. session on positive risk sentiment. This was likely sparked by the surprisingly better-than-expected jobs data from the U.S. (May sees biggest U.S. jobs increase ever of 2.5 million) and Canada (Canadian employment rose by 290,00).