GBP/USD: Brexit is back, lack of progress to stall sterling
|GBP/USD has been attempting to recover but concerns about US coronavirus kept it down. US Non-Farm Payrolls, additional COVID-19 stats, and official EU-UK negotiations stand out as the second quarter draws to an end, FXStreet’s analyst Yohay Elam reports.
Key quotes
“The EU and the UK resume talks on future relations today. Optimism about a breakthrough now comes to a test. If both sides leak details of a disagreement, sterling could suffer, while radio silence could provide some solace. Michel Barnier, the EU's Chief Negotiator, is set to address the press on Friday.”
“The highlight of the UK economic calendar awaits traders on Tuesday, with the final GDP figures for the first quarter. Britain will likely confirm the 2% contraction, which is relatively moderate in what is likely in store for the second quarter.”
“Final PMIs and a couple of speeches from BoE officials are also of interest, yet UK coronavirus stats are of higher importance. The government's next easing of the lockdown depends on improvement and that front.”
“Investors are hoping that the new coronavirus hotspots are able to cope with rising infections, yet that may not be the case. Hospitalizations and deaths are also critical to governors' responses and to the market mood. Further worsening may weigh on stocks and boost the greenback.”
“Non-Farm Payrolls are released on Thursday – as Americans enjoy the Independence Day weekend holiday on Friday. After May's surge of around 2.5 million jobs, another multi-million increase in positions is on the cards. The Unemployment Rate is expected to extend its decline but remains above 10%. NFP is the ‘king of indicators’ and will likely determine the dollar's moves through the end of the week.”
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