GBP/USD: Chancellor Rishi Sunak’s fiscal stimulus plan to stir sterling

GBP/USD has been rising amid hopes for UK fiscal stimulus and high-level Brexit talks. Today, Chancellor Sunak’s speech, US coronavirus figures and geopolitical tensions around Hong Kong are eyed, FXStreet’s analyst Yohay Elam briefs.

Key quotes

“Chancellor Rishi Sunak’s is set to lay out measures to kickstart the economy, and some of the ideas have already been released to the press. Previous ideas regarding green investment have been unfavorably compared with parallel schemes in major European countries. Sunak will speak at around 11:30 GMT and investors will pass judgment. For the pound – more spending is better.” 

“Chief EU Negotiator Michel Barnier visited London and met his British counterpart David Frost for dinner – which included fish. The fate of fisheries is one of the points of contention in talks. While their silence following the encounter may signal progress, headlines coming out from their bosses are less encouraging. PM Johnson told German Chancellor Merkel that the UK is ready to end the transition period without a trade deal. Talks may become more serious only after the summer.” 

“US coronavirus figures have resumed their rise after a temporary drop due to the ‘weekend effect.’ Cases are rising in most US states, with the focus on Florida, Texas, California, and Arizona. Hospitals in Houston are strained and the mortality rate – which was consistently falling – is on the rise again. New figures will be closely watched.” 

“Officials at the White House are considering attempting to break the Hong Kong Dollar peg to punish China for tightening its grip over the territory, yet investors seem to shrug off such prospects. The HKD remains in demand. Sino-British relations have also worsened after the UK announced it is opening its doors to most residents of its former colony.”