US Dollar posts its biggest weekly decline
Sterling continued to strengthen against a falling dollar and cable saw its biggest weekly gain since the start of June as data suggests that an economic recovery is underway. Sterling’s gains against the dollar were also influenced by the delay in a US stimulus package bill along with rising cases of Covid-19 and tensions growing between the US-China.
British PMI data surpassed market expectations and rose to 57.1 in July from 47.7 in June, indicating activity began to grow again after collapsing during the lockdown which began in March. Furthermore retail sales recovered to almost pre-lockdown levels in June and a survey measuring employers’ confidence in hiring and investing also rose, turning positive for the first time since February.
The dollar posted its biggest weekly decline in almost four months against a basket of currencies and also saw its largest weekly percentage loss against a surging euro since late March. The dollar fell due to a number of factors such as continued rise in coronavirus cases, a delay in the US stimulus package bill and simmering US-China tensions.
The US Federal Reserve is scheduled to hold a two-day policy meeting next week to lay out a plan to combat the crippling effect the coronavirus pandemic is having on the US economy. US coronavirus cases passed the 4 million mark which has contributed to over 140,000 deaths and tens of thousands of people out of work.
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