google-site-verification=RoadygaH2N3jsP-zBochCrn0ABtnedK76rnS7kMfyOU
Take a fresh look at your lifestyle.

Forex Market: The British Pound reaches 1.30

0


The pound sterling benefited on Wednesday when the dollar weakened in the Forex market on concerns about the impact of the coronavirus pandemic, but remained stable against the euro.

The pound rose to a five-month high to $ 1.3013, close to its pre-coronavirus levels.

Overnight implied volatility indicators in sterling / dollar rose to a month-and-a-half high, the Reuters news agency reports.

The British Pound reaches 1.30

Hedge funds are still short in the British currency, the latest CFTC data showed, but the positions were not as strong as they were in early June.

One reason for the pound gains may have been that money managers were rebalancing their currency exposures after stocks fell in Britain in July, said Marshall Gittler, head of investment research at BDSwiss Group. He noted that “hedge funds were particularly active buyers of pounds sterling.”

Others said the moves were likely caused by a broad weakening of the US dollar.

“It’s about growth, and growth expectations in Europe have started to outpace the US. I don’t see that really changing unless there is a second big wave in Europe,” said Jordan Rochester, currency strategist at Nomura. .

“You have the fiscal solidarity of the Europeans, you have a fiscal stimulus from the Germans, you have better mobility statistics in Europe. Everything is prepared for a good 2021 for Europe against the United States, ”he said. “I can see the $ 1.30 breaking.”

In addition, Britain said on Wednesday that it had signed an agreement to supply up to 60 million doses of a possible COVID-19 vaccine.

At press time, the GBPUSD is trading at 1.2978, awaiting the European markets.

Graph of the Pound Sterling of the last 5 days. Source: Yahoo Finance

Can the Pound’s rise be sustained?

However, some analysts believe that the rise in the pound sterling may be just a problem, forecasting weakness by the end of the year, when Brexit uncertainty may build up again when the transition period comes to an end.

“Pound fortune will be increasingly driven by monetary policy stance, the economy’s ability to recover from the global pandemic and the Brexit negotiations, which are effectively caught in the mud,” said Kamal Sharma, analyst currency of Bank of America, in a note to customers.

“These form the pillars of our structurally bearish vision and we take this opportunity to brand GBP / CHF as the preferred expression of that view,” he wrote.

Do you think the British Pound can hold 1.30 and go for more? Let us know your thoughts in the comment box.



Leave A Reply

Your email address will not be published.