Pound Climbs As BoE Bailey Downplays Effect Of New Wave Of Cases
October 08 2020 - 2:12AM
RTTF2
The pound gained ground against its major trading partners in
the European session on Thursday, after Bank of England Governor
Andrew Bailey said that the second wave of coronavius infections
would not have the same impact as the initial spike in spring.
The growing number of infections in the U.K. would dampen the
fragile recovery, though less severe than the first one earlier
this year, Bailey said in an interview with the Yorkshire Post.
Bailey added that the BoE is prepared to take more action if
needed.
The BoE chief suggested that Britain and the European Union
should be able to reach a trade agreement. "I do think it is in the
interests of both sides - let's be blunt - to get an agreement," he
told.
The pound appreciated to a 2-day high of 0.9070 against the
euro, from a low of 0.9110 seen at 6:00 pm ET. The pound may test
resistance around the 0.88 level, if it rises again.
The GBP/CHF pair hit a 6-day high of 1.1898. This followed a
drop to 1.1825 at 5:45 pm ET. The currency is seen finding
resistance around the 1.22 region.
Data from the State Secretariat for Economic Affairs showed that
Switzerland's jobless rate dropped marginally in September.
The jobless rate fell to a seasonally adjusted 3.3 percent in
September from 3.4 percent in August. Economists had expected a
rate of 3.4 percent.
The pound strengthened to a 2-day high of 1.2970 against the
dollar, after falling to 1.2907 at 5:45 pm ET. The pound is poised
to face around resistance around the 1.31 region.
Extending early rally, the pound spiked up to a 2-day high of
137.41 versus the yen. On the upside, immediate resistance is
possibly seen near the 141.00 region.
Data from the Ministry of Finance showed that Japan posted a
current account surplus of 2,102.8 billion yen in August, down 1.5
percent on year.
That exceeded expectations for a surplus of 1,983.7 billion yen
following the 1,468.3 billion yen surplus in July.
On the economic front, at 7:30 am ET, the European Central Bank
releases the account of the monetary policy meeting of the
Governing Council held on September 9-10.
Canada housing starts for September and U.S. weekly jobless
claims for the week ended October 3 will be released in the New
York session.
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