Much like the rest of the major currencies, the British pound also saw a round of choppy, low volatility price action this week. This was likely due to the usual battle between risk and counter currency flows versus speculation of another lockdown in the U.K., monetary policy speculation and improving U.K. economic data.
United Kingdom Headlines and Economic data
Monday:
UK Manufacturing PMI at 53.3 in July (Flash: 53.6)
Boris Johnson could ban domestic travel, tell millions to stay at home, and quarantine all holiday-makers as UK coronavirus cases continue to rise – this speculation on another lockdown was likely the driver for the broad move lower in Sterling.
Tuesday:
Sterling broadly moved lower during the morning London session, without any direct catalysts. It’s likely a continuation move of Monday’s speculation of another potential lockdown, with some potential pressure from broad risk-off sentiment on geopolitical tensions between the U.S. and China (China vows retaliation if any U.S. action against journalists)
Wednesday:
Fastest expansion of UK service sector activity for five years
in July
Thursday:
The Bank of England kept its key rate steady at 0.1% and its bond-buying target unchanged at £745B
Bank of England warns UK unemployment will hit 2.5m after Covid-19 slump
Bank of England: Coronavirus downturn less severe than feared
Fastest rise in U.K. construction output since October 2015
Friday: