Analysts say that market players remain wary of Britain's long term outlook for the economy.
The Pound Sterling moved higher versus a weaker US Dollar as FX traders dismissed the release of disappointing growth data in the UK. The ONS reported yesterday that the economy slumped by 20.4% last quarter, far worse than the EU or US which both saw GDP declines of 12.1% and 9.5%, respectively. Nonetheless, despite today's sentiment shift, analysts say that market players remain wary of Britain's long term outlook for the economy. The US Dollar is under pressure as investors are beginning to lose hope for a suitable conclusion to the stalemate in the Senate. The differences are all about the relief package, and how to provide support for the millions of American workers still out of a job as a result of the Coronavirus pandemic.
In London trading as of 11:25 am, the GDP/USD was trading higher at $1.3096, a gain of 0.5157% and off the session peak of $1.30993. The EUR/GBP was higher at 0.9046 Pence, up 0.0907%; in today's session, the pair has ranged from a low of 0.90320 Pence to a high of 0.90529 Pence.
With little in the way of relevant fundamentals driving today's FX trading, market players will look to tomorrow's data releases. In China, the National Bureau of Statistics will be releasing retail sales; analysts are predicting a rise to 0.1% in July (year-over-year basis), up from the previous reading of -1.8%. Later in the trading day, Eurostat will release preliminary 2nd quarter seasonally adjusted GDP data for the Eurozone; economists are predicting -12.1% on a quarterly basis, and -15% on an annualized basis. In the US, the Census Bureau will be releasing sales data for the month of July; analysts are calling for a drop in the figures to 1.9% from 7.5% on a month-over-month basis.