Gray Structure

26 JUNE 2020


Against the US Dollar                                              

This week, the Pound opened against the US Dollar at a month low of 1.2335 on Monday morning. The Pound reached some sort of market support which managed to pull back against the Greenback as PM Boris met up with French PM Macron and ECB President last week. This seemed to ease the selling of the Pound as the meetings were successful giving positive hopes that a UK-EU trade deal is still possible. The UK also released much better than expected PMI figures which brought Sterling back up to 1.2544 at Midnight on Tuesday. On Wednesday, there was very little market data out, seeing the market rush back to the safe haven currency of the US Dollar seeing the Pound lose it's gains from the start of the week back down to 1.2400 where there was strong resistance around this level. For the rest of the week the pair has been trading around the 1.24-1.25

Against the Euro

This week the Pound opened against the Euro just below 1.1050 trying to push higher to but couldn't quite manage the 1.1100 region. As seen above, the Pound fell lower on the Tuesday as there was a hard sell off against the Pound, falling to a three-month low of 1.1010. This was due to Brexit uncertainty, as we can see now that this topic does not support the currency.With the UK easing restrictions, this has had an impact on the Pound with analysts mentioning that the economy has not fully opened and with Covid 19 not completely under control, it could cause a huge impact if there were to be a second pandemic wave. The pair is currently trading at 1.1060 with no real direction.   

Brexit, Covid & Economic Data

Please note, Politics and Economics are both setting a main driver for the Pounds movements much more than other currencies. We may see some more volatility across the next few months especially if the UK's economic figures come out poor, bringing a negative impact on the Pound.

Market murmurs suggest if or when Boris strikes a fair deal with the EU, this will be beneficial for the Pound potentially pushing higher.  


Next week​

29th June - 3rd July 2020


09:00 EU Business Climate
12:00 EU German Consumer Price Index
12:00 EU German Harmonised Index
14:00 US Pending Home Sales
14:30 US Dallas Fed Manufacturing Business
19:00 US Fed's Williams Speech


07:00 UK Gross Domestic Product
10:00 EU Consumer Price Index
13:55 US S&P Case Shiller 
14:45 US Consumer Confidence
N/A US Fed's Chair Powell testifies
N/A US Treasury Speech


07:00 EU German Retail Sales
08:55 EU German Unemployment Rate
08:55 EU German Markit Manufacturing Rate
09:30 UK Markit Manufacturing PMI
12:00 UK BoE's Haskel Speech
13:15 US ADP Employment Change 
14:45 US Markit Manufacturing Change
15:00 US US ISM Manufacturing PMI 
19:00 US FOMC Minutes


10:00 EU Unemployment rate
13:30 US Non Farm Payrolls
13:30 US Initial Jobless Claims
12:30 US Unemployment rate
15:00 US Factory Orders


07:00 EU German Exports
07:00 EU German Currency Account
07:00 EU Industrial Production
09:00 EU Markit Services PMI
09:30 UK Markit Services PMI


Fed acts to keep banks 'prudent' amid virus risks


The Federal Reserve has warned that America's biggest banks could be hit by losses of up to $700bn (£563.6bn) in a severe downturn due to the pandemic. The US central bank said it would require firms to keep money on hand to guard against the risks. The Fed said it was barring share repurchases and limiting dividend payments until at least October. Although banks have been a source of "strength" so far, officials warned of a "high degree of uncertainty".

"Today's preserve the high levels of capital in the US banking system are an acknowledgement of both the strength of our largest banks, as well as the high degree of uncertainty we face," said Randal Quarles, the Fed's vice chair for supervision of the Federal Reserve's Board of Governors.

The announcement accompanied the results of the Federal Reserve's latest annual stress tests, which were instituted after the financial crisis. The stress tests are designed to suss out potential weakness in the financial system.



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