Pound (GBP) Rises as Non-Essential Shops Reopen Throughout the UK

Published: 15 Jun at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Italy,

Pound (GBP)

The Pound (GBP) edged higher against its peers today as non-essential UK shops reopened for the first time since the beginning of Britain’s nationwide Covid-19 lockdown. As a result, Sterling traders have become more optimistic about the nation’s economic recovery.

GBP has also benefited from hints form the Government that it could scrap or alter its 2-metre distancing guideline. This follows comments from Prime Minister Boris Johnson, who suggested that the UK now had more room to ‘manoeuvre’ now that the rate of infection continues to drop.

Euro (EUR)

The Euro (EUR) held steady this morning after the Eurozone’s trade surplus plummeted to €1.2 billion in April. Consequently, this has left many investors concerned that the bloc could struggle to revive its exports.

Today also saw the release of Italy’s inflation report for May, which fell to -0.2%. With the Eurozone’s economic data continuing to paint a bleak picture, this held back some of the single currency’s gains today.

US Dollar (USD)

The US Dollar (USD) mainly benefited from dampened risk sentiment today, with growing concerns over a new outbreak of Covid-19 cases in Beijing. As a result, investors have sought out safe-haven currencies as the outlook for the world’s second largest economy looks uncertain.

Meanwhile, ‘Greenback’ investors are looking ahead to tomorrow’s testimony from Jerome Powell, the Chairman of the Federal Reserve. Any dovish comments about the American economy would prove USD-negative.

Canadian Dollar (CAD)

The Canadian Dollar (USD) has benefited from an upswing in oil prices. But these have been since tempered by concerns over demand as a rising number of Covid-19 cases are beginning to weigh on oil prices.

Meanwhile, today saw the release of Canada’s manufacturing sales report for April, which fell by -28.5%. As a result, investors are becoming increasingly concerned for the health of the Canadian economy.

Australian Dollar (AUD)

The Australian Dollar (AUD) has been held back by anxieties over the Chinese economy after it was revealed that Beijing had experienced new cases of Covid-19.

Today also saw concerns over Chinese economic data, which has consistently pointed to a slower-than-expected recovery.

Shaun Roache, Asia-Pacific chief economist at S&P Global Ratings, comments:

‘China’s experience so far suggests that it will be a hard road back for the global economy.’

‘We still expect a rebound in the second half, but expectations for a surge in pent-up demand may be disappointed.’

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) has also suffered from dampened risk-appetite today. With fears growing that the New Zealand economy could also suffer from a slowly recovering Chinese economy.

With China being New Zealand’s largest trading partner, this has heightened concern for the nation’s economic recovery in the months ahead.

As of Monday, 15th June 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1142, GBP USD exchange rate was 1.2623, GBP AUD exchange rate was 1.8168, GBP NZD exchange rate was 1.9445, GBP CAD exchange rate was 1.7089, and GBP CNY exchange rate was 8.951.

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