GBP/USD: The deck is stacked against cable

UK past could have been worse but the bleak labor market prospects and dollar’s haven flows point to falls, according to FXStreet’s analyst Yohay Elam. GBP/USD is flat, trading just below the 1.3050 level.

Key quotes

“The UK economy shrank by 20.4% in the second quarter of 2020, better than -20.5% projected. YoY, output fell by 21.7%, also above estimates. Perhaps the truly encouraging figure is June's monthly rebound of 8.7%, not only topping forecasts but showing that Britain's gradual reopening also bears economic fruits. That recovery, accompanied by hopes that the uptrend continues in July and beyond, pushed the pound higher.”

“Chancellor Rishi Sunk is sending sterling lower once again. Apart from reiterating that the furlough scheme is unsustainable, he added that many will lose their jobs.”

“The greenback is benefiting from higher bond yields as the US issues a record amount of debt that investors are unable to absorb at low returns. The world´s reserve currency is also benefiting from safe-haven flows originating from the impasse on US fiscal stimulus and Sino-American tensions ahead of trade talks.”

“Investors are skeptical about Russia's announcement that it developed a COVID-19 vaccine and more worried that Texas will be keeping restrictions in place despite some improvement in battling the disease.” 


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 trades at fresh September lows

Risk-aversion is the main theme this Monday, amid resurgent coronavirus cases in the Old Continent and the announcement of  new lockdowns. ECB’s Lagarde said the economic recovery in the EU is “very uncertain, uneven and incomplete.”


GBP/USD extends slump sub-1.2800

The Pound plunged on a dismal market mood, as PM Johnson acknowledged the kingdom is undergoing a second coronavirus wave. GBP/USD trades at one-week lows around 1.2800.


XAU/USD dives to sub-$1900 levels, six-week lows

Gold extended last week's rejection slide from a short-term descending trend-line resistance and tumbled to six-week lows during the early North American session.

Gold News

Bitcoin needs to defend critical support level at $10,600

Bitcoin was trading inside an ascending triangle pattern between September 3 and September 15, which is created when the price establishes higher lows and a horizontal trendline around the swing highs. 

Read more

WTI plummets to $39, down more than 4%

Crude oil prices closed the previous week sharply higher but erased a large portion of those gains on Monday. As of writing, the barrel of West Texas Intermediate was down 4.2%, the biggest daily percentage decline in nearly two weeks, at $39.15.

Oil News