- Eurozone Improving Economic Data
- U.K Economy Reopening
- Hong Kong Dollar Sales
EUR/GBP recovery from one-week lows received a boost on Eurozone PMI coming in better than expected. However, a resurgence British Pound continues to suppress the upside momentum.
The pair was up by more than 0.2%, Wednesday morning, as traders remained upbeat about the Eurozone economy, following a series of better than expected economic data. The pair also continues to edge higher as the Pound remains susceptible to the global risk environment.
A strengthened Euro in the wake of Eurozone June PMI coming in at 46.9 against expected 44.5 is one of the catalysts fuelling bullish momentum in the EUR/GBP pair. Similarly, Service PMI improved to 47.3 against expected 41.
Standing in the way of the EUR/GBP pair appreciating further is growing hopes about the U.K economy as Prime Minister, Boris Johnson, unveils big lockdown relaxation measures. The U.K economy could be up and running as of July 4th with the easing of lockdown restrictions. The opening could fuel economic activity needed to avert further economic contraction in the wake of the COVID-19 disruptions.
The Sterling Pound is seen strengthening cross the board as the COVID-19 situation across the U.K continues to improve. Optimism about ongoing BREXIT talks with the European Union also continues to offer support to the Sterling, a development that could curtail EUR/GBP rally.
Hong Kong Dollar Sales
The USD/HKD pair, on the other hand, was struggling for direction at four-year lows as the Hong Kong Monetary Authority sold $147 million in the market in an attempt to weaken the HKD.
The local currency has hit the lower end of its trading band, forcing policymakers to swing into action to weaken it. The Hong Kong Dollar trades in a narrow 7.75 t 7.85 range against the dollar that the policymakers strive to maintain.