The concerns about a second wave of infections in the UK is also weighing on Sterling.
The Pound Sterling inched higher against its US counterpart after the relief package for the US Coronavirus pandemic stalled in the US Congress, which sent US bond yields lower. The Pound was trading close to last week’s 5-month high in the London session, largely a factor of weakness in the US Dollar as opposed to strength in Sterling. Analysts point out that the failure of the Congress to push through a bill that would extend benefits to those impacted by COVID-19 is when the Dollar began to lose ground; the unemployment benefits of the previous bill expired last Friday.
As of 11:06 am in London, the GBP/USD was higher at $1.3125, a gain of 0.4654% and sliding from the session peak of $1.31335. The EUR/GBP was trading at 0.9033 Pence, up 0.062%; the pair has ranged from a low of 0.90115 Pence to a high of 0.90471 Pence. The GBP/JPY was higher at 138.7790 Yen, up 0.4851%.
BoE and PMIs in Focus
Market players are waiting to see the outcome of the Bank of England’s monetary policy meeting which is scheduled for tomorrow. The concerns about a second wave of infections in the UK is also weighing on Sterling. The Prime Minister has decided to postpone his plans to ease some of the lockdown measures given the rise in the numbers; virologists are saying that the second wave might be far worse than the initial outbreak. Later today, market focus will shift to the US where data on the US manufacturing sector will be released. Analysts are predicting that the Markit PMI for the services sector will come in with a reading of 49.6 for July, essentially flat. The ISM non-manufacturing PMI is predicted to come in at 55, a fall from the previous 57.1.