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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.

Overlay of GBP Pairs: 1-Hour Forex Chart
Overlay of GBP Pairs: 1-Hour Forex Chart
GBP Weekly Performance from MarketMilk
GBP Weekly Performance from MarketMilk

United Kingdom Headlines and Economic data

Monday:

Sharp downturn in UK manufacturing continues in May, but pace of contraction eases since April

EU boss Michel Barnier expects Britain to make big push to break Brexit deadlock this week

Johnson plans Brexit talks with EU’s von der Leyen, warned to reach deal pre-autumn – FT

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.

Tuesday:

No-Deal Brexit Threat Looms Over Pandemic-Ravaged U.K.

Nationwide HPI shows Annual UK house price growth slows to 1.8%; -1.7% m/m

UK mortgage approvals slumped to record low in April lockdown-BoE

New gross borrowing in the UK fell to £11.8B in April, roughly half its February level

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.

Wednesday:

Bank of England reminds banks of ‘no deal’ Brexit risk

UK Services PMI: 29.0 in May vs. 13.4 in April, still well below the 50.00 expansion mark

Thursday:

Negative Rates Aren’t a Near-Term Reality for BOE, Hauser Says

Pandemic raises hard questions for policymakers, Bank of England says

U.K. car sales plunge 89% in May

UK Construction PMI: Construction sector downturn eases, following unprecedented slump in April

Friday:

U.K. GfK consumer confidence index down from -34 to -36

Brexit Talks Between E.U. and U.K. Deadlocked Again

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).