Pound Gathers Momentum While US Dollar Remains Subdued

Through trading on Thursday, the Pound made some considerable gains off the back of the news that the Bank of England had revised its economic forecasts. This meant that the economy was expected to shrink less than the expected 14% while unemployment is not expected to reach 10% as previously expected. There was more good news for the currency as the UK’s construction PMI reached the highest levels seen since 2015 during July. At the end of trading, the currency finished the day at 1.1061 against the Euro and 1.3143 against the US Dollar according to the Foreign Exchange market figures.

There was a notable lack of confidence in the Euro on Thursday despite German factory orders increasing considerably from 10.4% to 27.9%. However, there were concerns from analysts who questioned whether the recovery is sustainable given the current structural issues throughout the Eurozone, not forgetting the impact that the potential second wave of coronavirus could have.

The US Dollar was slow moving on Thursday as talks surrounding new coronavirus stimulus fell flat. Despite Republican and Democratic leaders making it clear that they wanted to make a deal, no deal was reached. Focus is going to shift to the non-farm payrolls for July while employment figures are likely to leave investors disappointed.

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