The British pound took early week hits on both broadly negative risk sentiment, rising coronavirus cases, and potential lockdowns coming to the U.K.
But traders changed their tune on Sterling mid-week as rhetoric on Brexit improved from various top EU and U.K. officials, positive economic updates from the U.K., and additional stimulus was announced to help the U.K.’s employment situation.
United Kingdom Headlines and Economic data
BOE Governor Bailey talks down the idea of moving rates to negative – short-term bullish reaction in Sterling as traders seemed to flip their focus back to Brexit and pandemic challenges to push the currency lower against the major during the U.S. session.
Rishi Sunak unveils emergency jobs scheme – will replace the furlough scheme; workers will get three quarters of their normal salaries for six months.
Bank of England 2020 Q3 Quarterly Bulletin
- Businesses reported that the spread of Covid-19 and the measures to contain it led to a fall in sales of around 30% in 2020 Q2. Sales are expected to recover gradually, but further reductions in employment are expected in the second half of 2020.
- Businesses’ expectations of future sales and employment growth became skewed to the downside. This means that businesses thought that there was an increased risk of bad outcomes occurring.