30.06.202017:15 Forex Analysis & Reviews: Greenback rushed up, leaving the pound behind

The demand in greenback continues to grow amid increasing risks of the second wave of the COVID-19 pandemic in the world. According to the World Health Organization, the peak of the incidence rate is only ahead, and much will depend on how well-coordinated the actions of the governments of states aimed at a common victory over the infection. So far, a general trend has not been observed, and the situation continues to escalate.

This morning, the US dollar index against a basket of six major world currencies rose slightly by 0.1% and reached a level of 97.645. This indicates that the greenback began to regain its former reputation.

The ratio of the euro and the dollar decreased by 0.3%. Today's level was at around 1.1212 dollars per euro. Meanwhile, the dollar against the Japanese yen, on the contrary, increased by 0.1% and was in the region of 107.64 yen per dollar.

Yesterday, the head of the US Federal Reserve made a statement in which, among other things, he drew attention to the fact that the world's largest economy has very vague prospects for development in the current crisis conditions. The main thing that the whole course of further events will depend on is the containment of the second wave of the coronavirus pandemic, as well as measures to support a weakened economy.

In the morning, the pound sterling felt the greatest pressure, which was caused by the publication of the latest statistics on the level of GDP in the country. According to statistics, in the first quarter of this year, the UK economy fell by 2.2% which is more serious than the previously expected fall. Recall that the previous forecasts noted a decrease of no more than 2%, but in reality, the numbers turned out to be worse. Such a decline has not been noted for more than forty years, which, of course, seriously affected the exchange rate of the national currency.

The course of the pound sterling against the US dollar in the morning showed a decrease of 0.2%, which pushed it to the mark of 1.2276 dollars per pound. This level is slightly higher than the minimum value for the current month, which was recorded on Monday and was in the region of 1.2252 dollars per pound.

The pound in relation to the euro is also declining. The fall is still insignificant with -0.1%. The current level is at around 0.9133 euros per pound. Recall that yesterday there was a rapid growth, which allowed the currency pair to reach the level of 0.9175 euros per pound. Thus, the pound today has lost 1.6% against the euro.

Market participants also express serious and well-founded concerns about the planned financing of the infrastructure sector, as announced by the UK government. As it became known after the speech of the Prime Minister of the country Boris Johnson, the state plans to increase the line of these expenses, which, in turn, is very ambiguous by investors.

The uncertainty in negotiations with the EU over trade relations is hanging over the currency like a sword of Damocles. So far, no significant progress has been made in the negotiation process. Consensus has not been reached, which means that this problem will continue to put pressure on the pound, forcing it to adjust downward.

Thus, there were practically no factors for the growth of the pound sterling, while the greenback seemed to find its foothold again and went up.