Some positive data from the UK's construction sector may have helped to keep the momentum positive for Sterling.
The Bank of England's newly announced outlook was far less gloomy than previous reports, which helped the Pound Sterling hit a fresh 5-month peak against the US Dollar. While the UK central bank did say that expectations were that the British economy was unlikely to recover back to 2019 levels until the end of 2021, it did revise May's projections for the remainder of 2020. Currency analysts say that, overall, there is a less dovish outlook than markets had been anticipating, which could lead to additional gains for Sterling. One cautionary note, though, is that the BoE, given the language used in the statement, seems to once again be open to the possibility of a negative rate environment.
As of 11:10 am in London trading, the GBP/USD was trading higher at $1.3177, a gain of 0.4896% and sliding from the session peak of $1.31844. The EUR/GBP was lower at 0.8999 Pence, down 0.519%, with the pair ranging from a trough of 0.89894 Pence to a peak of 0.90542 Pence. The GBP/JPY was also higher at 139.09 Yen, a gain of 0.4354%.
US Labor Data Eyed
Some positive data from the UK's construction sector may also have helped to keep the momentum positive for Sterling. The Markit Construction PMI for July came in with an unexpectedly improved reading of 58.1, against a predicted 57, rising from the previous 55.3. Germany's factory orders were also better than expected at 27.9% (seasonally adjusted), against analysts prediction of a decline to 10.1% (from 10.4%). The EUR/USD was lower at $1.1862, down 0.0202%. Later today, market focus will shift to the US when the latest unemployment figures come out. Analysts are expecting to see a slight decline from the previous week's numbers for both initial and continuing claims.