GBP/USD extends Friday’s recovery gains from 1.2438 amid broad US dollar weakness to 1.2496 as registers 0.13% gains. For the week ahead, after markets cheered the Nonfarm Payrolls, America's coronavirus situation and Brexit talks will likely continue weighing on cable and could turn into another ‘dead cat bounce,’ FXStreet’s analyst Yohay Elam reports.
Key quotes
“Chief EU Negotiator Michel Barnier and his British counterpart David Frost will meet and try to iron out differences on the EU's demand for a ‘level playing field’ – keeping EU regulations after the Brexit transition period expires in 2021. In return, Brussels will grant easy access to its single market. Many expect talks to heat up only after the summer and closer to the deadline, so that may have to wait for another week.”
“Investors will examine UK coronavirus cases, which are going in the right direction – down. If infections increase due to the current opening, it may take time to see it in the chart. Nevertheless, as long as it falls, sterling will receive support.”
“Americans are celebrating 244 years to the founding of the country in a less-than-festive atmosphere as COVID-19 rages. Daily figures from Florida, California, Texas, and also smaller states will likely move markets.”
“The ISM Non-Manufacturing PMI is set to extend its recovery in June, following the footsteps of the manufacturing sector. The publication tends to have greater weight when it is published ahead of the Non-Farm Payrolls but is of interest also now.”
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