Analysts are looking at the bigger picture and have grave doubts that the US economy can make out any kind of recovery, despite some recent upbeat data on US factory output.
The Pound Sterling earlier made headway against the US Dollar, but analysts say that any further gains are being capped as concerns over the upcoming Bank of England meeting as well as another round of infections from Covid-19. The March/April sell-off that had been fueled by the repercussions of the pandemic had nearly been reversed and the GBP/USD was moving close to a 5-month peak. The likelihood that the UK government will be able to generate a breakthrough as regards the Brexit negotiations are also a concern for Pound traders. Currency strategists point out that the Pound's gains are also a factor of residual Dollar weakness from the Federal Reserve's actions.
As of 11:10 am in London, the GBP/USD was trading at $1.3064, a loss of 0.0413% and off the session peak of $1.31083, while the low was recorded at $1.30458. The EUR/GBP was trading higher at 0.9021 Pence, a gain of 0.3247%; the pair has ranged from 0.89860 Pence to 0.90341 Pence in this session.
Dollar Weighed by Uncertainty
The Dollar is also under pressure as a result of political wrangling between the Democrats and Republicans in response to extending unemployment benefits which recently expired. Surging numbers of individuals infected with the Coronavirus across many areas of the US are compelling leaders to rethink their initial plans to begin to reopen the local economies. Analysts are looking at the bigger picture and have grave doubts that the US economy can make out any kind of recovery, despite some recent upbeat data on US factory output. The USD/JPY was trading at 106.0180 Yen, up 0.05% and off the earlier low of 105.833 Yen.