Brexit uncertainty kept the Pound Sterling lower against its European counterpart even as a weaker US Dollar helped to push the Pound higher. Analysts say that the death toll from the Coronavirus coupled with the possibility that the Bank of England while moving to negative rates has put pressure on Sterling. The British government is taking steps to reopen some shops next Monday, along with some other recreational venues. There is still a concern that the Coronavirus could have a resurgence once the restrictions are loosened, especially since no vaccine has yet been discovered. The worry over the Brexit transition is still also playing havoc with sentiment. Despite reassurances from the British government that they were willing to make some compromises, there has been very little positive movement out of the discussions.
As of 10:57 am in London trade, the EUR/GBP was trading flat at 0.8906 Pence; the pair has ranged from a session low of 0.88822 Pence to a high of 0.89205 Pence. The GBP/USD was higher at $1.2753, a gain of 0.2011% and off the session peak of $1.27872.
Federal Reserve in Focus
Later today, FX traders will focus on the data coming out of the US. Chief among the indicators are personal inflation numbers for May, including core CPI which analysts are predicting will decline to 1.3% on a year-over-year basis. The Federal Reserve is also due to release its policy decision; analysts expect interest rates to remain at the current 0.25% level. The Fed will release a statement in conjunction with the announcement, as well as present its economic projections which will be of even greater significance given the Coronavirus pandemic.