Sterling did a big u-turn going from biggest winner last week to biggest loser this week. Concerns from the Bank of England on the jobs outlook and a weaker-than-expected read on the economy were the likely drivers for traders to put the pressure on the British pound this week.
United Kingdom Headlines and Economic data
Monday:
Gove defends £705m plan for border posts and staff
UK trade fair industry warns 30,000 jobs at risk as events yet to resume
Bank of England Debating Digital Currency Creation, Bailey Says
BoE’s Bailey sees economy improving, but ‘very worried’ about jobs
After an early Asia session pop higher, Sterling moved lower during the U.S. session, possibly on a combination of dovish rhetoric from the BOE Governor and a flip in risk sentiment back to negative during the U.S. session after news broke of California closing a variety of businesses back down to send the franc higher.
Tuesday:
U.K. GDP expanded by 1.8% in May on the month, below expectations of 5.5% m/m rebound
Sterling found buyers during the U.S. session, likely on positive global risk sentiment. This time it was positive equity earnings headlines (Dow rises for a third straight day, rallies more than 500 points as Caterpillar leads) that appeared to be the main driver, over shadowing negative geopolitical news (Trump “not interested” in Phase 2 trade talks with China) and accelerating virus cases growth.
Wednesday:
UK Consumer Prices Index (CPI) 12-month rate was 0.6% in June 2020, up from 0.5% in May.
BoE’s Tenreyro sees “incomplete V” shape for UK recovery
BOE’s Bailey Tells MPs He Sees Low U.K. Rates for Long Time
Thursday:
Working Hours Slump Points to Trouble for U.K. Labor Market
Friday:
Bank of England’s Bailey sees UK economy beginning to recover
Boris Johnson Relaxes U.K. Work-From-Home Rules After Lockdown
