Pound Higher Despite Labor Data

Barbara Zigah

The death toll in the UK has now surpassed that of Italy, and the measures taken to stem the spread have hit the UK's labor market hard

GBPThe Pound Sterling edged higher against its US and European counterparts and steadied in early Tuesday trading in London. News that an antibody trial for the Coronavirus seems to be yielding positive signs had helped to push risk-related currencies higher. Currency strategists say that a relief rally is helping to improve investors' risk appetite, in general, but that the Pound's gains are expected to be limited. The reason for that limitations is the ongoing discussion of a move into a negative rate environment by the Bank of England; the prospects that monetary policy could be even looser than it currently is has unsettled Pound traders.

As of 10:51 am in London, the GBP/USD was trading higher at $1.2247, a gain of 0.4437% and off the session peak of $1.22691. The EUR/GBP was lower at 0.8942 Pence, down 0.0767%, with the pair in a trading band that ranges from 0.89144 Pence to 0.89602 Pence. The GBP/JPY was higher at 131.6880 Yen, a gain of 0.6398% and off the earlier high of 131.855 Yen.

BoE to Discuss Negative Rates

On Monday, one of the rate setting members of the Bank of England's Monetary Policy Committee commented that negative interest rates had not yet been ruled out. That followed the media report that the BoE's chief economist had said that that topic was being urgently considered given the economic outlook for the UK. The repercussions of the Coronavirus continue to weigh heavily on the UK economy. The death toll in the UK has now surpassed that of Italy, and the measures taken to stem the spread have hit the UK's labor market hard, with a claimant count change of -856,600 in April, far worse than the expected 150,000 that analysts had predicted.

About the Author
Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.

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