RationalFX : Sterling managed to rally for the majority of Tuesday after market investors seemed to switch back to a more risk on attitude……
This comes despite the fact that Prime Minister Boris Johnson remains in intensive care. There won’t be an injection of sudden confidence into the market whilst the UK leader is currently incapacitated, but concerns on the short term approach to Covid-19 have been lessened by the fact that it is unlikely to change the government policy.
Yesterday also saw a strong day for British assets, with government bonds attracting their strongest demand since 2005. The aim now is to sell a record £45 billion worth this month, with the plan to have an unprecedented two auctions per day. However, investors still remain cautious as they wait to see how governments will design exit strategies from the current imposed lockdowns.
The Greenback had a mixed day yesterday as it initially suffered its worst day yesterday for 2 weeks as the risk appetite improved after hopes continued to grow that lockdowns have managed to slow the spread of Coronavirus in some countries, notably Spain and Italy. However, upon the end of US trading and the Asia opening, virus worries have returned and we have seen a risk reversal on dollar losses. The concern that doesn’t appear to be fading is what the economic impact will be, with future data releases being in full focus.
19:00- USD- FOMC Minutes
Source : ETFWorld.co.uk