- Posted by currencies in Bank of England, Brexit, coronavirus, Sterling, UK, Uncategorised
- July 16, 2020
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The British pound slipped as risk aversion swept through markets, boosting the safe-haven appeal of the U.S. dollar as upbeat Chinese growth data failed to lift sentiment.
Against the dollar, the pound slipped a quarter of a percent to $1.2556, even though data showed the slide in Britain’s jobs market eased in June.
We still believe going forward the UK faces issues and think the economy will fare worse than others in Europe.
The number of employees on company payrolls fell by 649,000 from March to June, but the largest declines came at the start of the lockdown, the Office for National Statistics said. The people on payrolls fell by over 74,400 in June, compared with April’s 450,000 and May’s 124,000.
With British gross domestic product data for May rising less than expected, investors are questioning whether the fiscal stimulus measures already announced will be enough to prop up the economy.
Speculators are shorting the pound. The latest CFTC positioning data showed that leveraged funds held $1.28 billion in shorts, though the amount had declined in recent weeks and was not as high as around the same time last year.
The pound also weakened against the euro, falling 0.2% before a European Central Bank meeting later on Thursday.