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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.

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:

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.

The headline rate of output inflation for goods leaving the factory gate was negative 0.8% on the year to June 2020, up from a negative 1.2% in May 2020

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