Pound’s advance slowed by coronavirus concerns

  • Pound’s advance slowed by coronavirus concerns

     

    The pound made modest gains over the past couple of weeks, with domestic coronavirus concerns preventing a stronger rally.

    During this period, we’ve seen GBP/EUR consolidate at €1.16, whilst EUR/GBP has retreated to £0.85.

    Meanwhile, GBP/USD has rallied from $1.40 to $1.42, while EUR/USD has risen to $1.22.

    Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…

     

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    What’s been happening?

    The pound continued to trend higher through the second half of May amidst reopening optimism, but faced headwinds due to concerns over the spread of the delta variant of the coronavirus in the UK.

    The US dollar, meanwhile, has been on the defensive through a large part of the past two weeks, being undermined by dovish Federal Reserve expectations and a prevailing bullish mood.

    At the same time, the euro traded with modest gains as the EU’s accelerating vaccine rollout has bolstered the Eurozone’s economic prospects.

     

    What do you need to look out for? 

    Looking ahead, the pound’s fortunes in the first half of June will rest on the whether or not the UK government goes ahead with its plans to open more of the economy later in the month, with any delays likely to sink GBP exchange rates.

    The immediate focus for USD investors will be the latest US payrolls reading. Will a strong reading in May help to make up for April’s dire reading?

    Meanwhile, the European Central Bank’s (ECB) latest policy meeting will be a key catalyst of movement for the euro, with a dovish outlook from the bank likely to result in EUR exchange rates weakening.

     

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