Sterling rises against safe havens

GBP

Sterling rallied against the US Dollar on Tuesday as dollar weakness continues to drive cable higher. Sterling’s gains were capped against the Euro as Brexit uncertainty is still effecting the currency pair. Due to global risk appetite improving, this has led to sterling rising against most major currencies.

The pound has risen by more than 3.1% against the dollar since March as economies reopening around the world has caused less demand for the safe haven dollar. Reopening of the UK economy has given optimism to consumers and investors that the worst of the pandemic is over and an economic recovery is on its way.

Furthermore, fourth round of talks between the UK and the EU has finished with both sides saying a lack of progress has been made. Britain has until the end of July to request an extension to the transition period which is due to end after December 2020.

Lastly, Japan’s foreign minister commented that the UK and Japan are now in talks over a potential trade deal.

Key announcements

13.30 – USD – CPI m/m – Forecast at 0% from previous -0.8%
13:30 – USD – Core CPI m/m – Forecast at 0% from previous -0.4%
19:00 – USD – FOMC Press conference