Forex Market: The British Pound recovers in the session on Tuesday, after touching a two-week low against the dollar. A combination of friendlier Brexit conversations and better employment data helped GBPUSD.
Britain’s unemployment rate unexpectedly held at 3.9% in the three months to April, as companies turned to the government job retention scheme to keep employees on their books during a record drop in economic output due to to the coronavirus crisis.
The dollar weakened when the US Federal Reserve He said he planned to start his corporate bond purchase plan Tuesday. He had previously announced his Main Street business loan program.
Forex Market: The British Pound recovers
This year, the pound has lost almost 5% against the dollar, but is recovering 0.3% on Tuesday, touching $ 1.2645. Against the euro, the pound rises 0.2% to 0.8963.
Steen Jakobsen, chief economist at Saxo Bank, said the “positive comments” from Britain and the European Union after the Brexit talks gave the British Pound a boost.
“UK Prime Minister Boris Johnson and EU leaders suggest a friendlier situation than other recent comments,” Jakobsen said in a note to clients.
Leaders of Britain and the European Union agreed Monday that talks about their future relationship should be stepped up. And Prime Minister Boris Johnson suggested a deal could be reached in July.
With a status quo transition agreement due to expire at the end of the year, Britain is seeking a free trade agreement with the EU, which it left on January 31, but negotiators have so far made little progress, Reuters reported.
Key macro data
For this week, investors also expect Bank of England meeting on Thursday, when he is expected to announce a further increase of at least £ 100 billion ($ 126 billion) in his firepower to buy bonds.
Bank of England Governor Andrew Bailey said the British central bank had to be prepared to do more to help the economy because of the risk of long-term damage caused by the blocking of the coronavirus.
It should not be forgotten that the interest rate decision will be published the same day, which is expected to be unchanged at 0.1%.
The information in this content has been extracted from reliable sources detailed below:
1- Own writing of the author of the content.
2- Part of the content was taken from the Reuters agency.
3- XTB Sterling Pound Chart.