GBPUSD just about managed to hold above 1.25 interbank market on Friday, closing the week with a 0.45 per cent gain, although has already given up 0.5 perc cent during this morning’s trading. That means, the pound is currently almost 6 percent better against the US dollar over the past month, although the UK currency still remains almost 4 per cent down against pre-coronavirus levels.
The pound has been supported by the recovery of UK prime minister, Boris Johnson and his return to office. Boris taking the reins back from deputy prime minister Dominic Raab and addressing the press and public has been welcomed by markets. A weaker US dollar also contributed to last week’s move in GBPUSD.
However, whilst the pound has been on a steady climb against the Greenback, this trajectory is by no means sure to continue. Just last week, the Office for Budget Responsibility published a scenario in which UK GDP crashed by 35 per cent this quarter and fell 13 per cent for the calendar year. The International Monetary Fund has also released a set of gloomy predictions.
Making the biggest statement of his political life, Dominic Raab confirmed the UK would be on lockdown for a further 3 weeks. The coronavirus UK death toll has now exceeded 16,000 although this will almost certainly rise when the true number of deaths in care homes is finally confirmed.
Trump Keen to Reopen US Economy as US Coronavirus Cases Surpasses 700k
On the other side of the pond, US president, Donald Trump is desperate for businesses to reopen although health officials will likely continue to insist that the shutdown remains in place. Ultimately, it could be down to state governors, who have the authority, to decide what approach they take as they try to balance the immediate need to save lives against the potentially catastrophic economic consequences. As US coronavirus cases surpass 700,000, several states have extended stay at home measures and social distancing orders into May, although the US has now seen a number of protests pop up over the country, demanding the opening of the US economy. President Trump appeared to support this movement with a tweet.
Following a further 5.2 million people filing for unemployment last week, the total US jobless claims now stands at more than 22 million. Existing home sales numbers for last month will be of some interest this week although investors eyes will be far more focused on weekly unemployment claims, as well as continuing claims, both of which are expected to remain in the millions.
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