The sterling is looking to add to Monday’s gains and is now taking GBP/USD to the 1.3070 region in the wake of results from the UK docket. Cable fails to extend the positive note seen at the beginning of the week, slipping back to the 1.3070 region after briefly attempting to re-test the 1.3100 neighborhood during early trade.
The sterling seems to have entered into a consolidation phase following last week’s tops in levels just shy of 1.32 the figure. Dollar dynamics have mainly been behind the July-August rally, although a more convincing performance in Cable faces the usual risks associated with more domestic drivers, like the handling of the coronavirus crisis by the UK government, the impact of the pandemic on the economy, unabated Brexit effervescence and the neutral/dovish stance from the Bank of England (BoE). In the meantime, Cable’s upside momentum remains propped up by dollar weakness and the generalized better mood in the risk complex, relegating concerns over the progress of the pandemic and its impact on the UK economy as well as over the UK-EU trade negotiations.