GBP/USD: Any surprising clash in trade to boost safe-haven dollar

GBP/USD has been on the back foot due to the US dollar's strength. The UK's gradual reopening may help sterling but the pound has reasons to stay stuck in a dark alley, Yohay Elam, an analyst at FXStreet, informs.

Key quotes

“Casons, theaters – and bowling alleys – are among the establishments that will be able to reopen from the weekend in England. The pound-positive development is simultaneously marred by another COVID-19-related announcement – Britain will require all those coming from France, the Netherlands, and several other countries to quarantine.”

“The ongoing pain for sterling comes from prospects for the job market – Chancellor of the Exchequer Rishi Sunak's statement that ‘many people will lose their jobs’ is still weighing.” 

“Brexit talks are set to resume on Tuesday and headlines ahead of the talks may move the pound. However, officials are not expecting any outcomes before autumn.” 

“A significant test awaits the economy and markets on Friday – retail sales for July. Government support kept consumption going in July, but the virus may have kept consumers at their homes. Economists expect a slowdown in the recovery. The University of Michigan's preliminary Consumer Sentiment Index for August is also of interest and is set to remain stable.” 

“China said it has fulfilled the Phase One trade deal with the US – a statement coming ahead of high-level talks between the world's largest economies. Despite the deterioration in Sino-American relations, both Washington and Beijing would like trade to flow.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD edges higher ahead of data, Fed speeches, presidential debate

EUR/USD is rising toward 1.17 as markets dismiss weak German inflation figures. Uncertainty about US fiscal stimulus and the elections is elevated ahead of the first presidential debate and US consumer confidence.


GBP/USD retreats from highs amid Brexit, coronavirus uncertainty

GBP/USD is retreating from the highs close to 1.29 as concerns about Brexit talks and rising UK coronavirus cases are taking their toll on the pound. 


Gold consolidates in a range around $1880 region

Gold was seen oscillating in a range through the early European session on Tuesday. A softer USD was seen extending some support to the dollar-denominated commodity. The upside seems limited ahead of the first US presidential debate later this Tuesday.

Gold News

Forex Today: Dollar declines on hopes for a US fiscal deal, ahead of presidential debate

Stock markets remain cautiously optimistic and the dollar is on the back foot, extending the reversal from last week's moves. Investors are eyeing a slew of Fed speeches, fresh hopes related to Brexit, and the first presidential debate.

Read more

WTI stalls four-day winning streak, tests $40 ahead of API data

WTI (futures on Nymex) turns negative for the first time in five trading sessions on Tuesday, having reversed half the Monday’s 1% rally to five-week highs of $40.80.

Oil News