GBP/USD: Backwind from the BoE to continue pushing the pound higher

US jobless claims, fiscal stimulus talks and Non-Farm Payrolls tensions are in play while GBP/USD has hit 1.3183, the highest since March, amid an upbeat message from the BoE, FXStreet’s analyst Yohay Elam informs.

Key quotes

“The negative message on sub-zero borrowing costs is boosting the pound. Andrew Bailey, Governor of the BoE, has told reporters not to think that the BoE is about to use negative rates, following other positive developments in the bank's ‘Super Thursday.’ The BoE reduced its contraction forecast for 2020 to -9.5% from 14% beforehand and also noted that high-frequency indicators are pointing to robust spending. While the bank refrained from hinting about new bond-buying and repeated that risks are skewed to the downside, Bailey and his colleagues are seeing the glass half full.”

“Initial jobless claims are projected to fall after a worrying increase beforehand. The high-frequency weekly figures will add to jitters ahead of Friday's all-important Non-Farm Payrolls. Did the US lose jobs in July? The chances are rising, and analysts may downscale their forecasts.” 

“President Trump has threatened to use an executive order to extend federal unemployment claims. His move comes as Democrats and Republicans remain divided on the next fiscal boost. Markets are pricing in a large package, seeing through politicians' blame-game. Further developments in Washington and updated coronavirus figures are eyed later in the day. The COVID-19 curves have begun bending lower in America, yet remain elevated.” 

“UK coronavirus cases are grinding higher, with the Scottish administration slapping new restrictions on Aberdeen. For now, the focus is on the BoE and not on COVID-19, nor on US-UK trade talks. Negotiations continue, but expectations for an accord this year remain slim.”