Pound Climbs On Easing Virus Restrictions

By | May 18, 2020
Pound Climbs On Easing Virus Restrictions

The pound advanced against its major counterparts in the European session on Monday, as easing of coronavirus restrictions in several European countries boosted market sentiment.

Restaurants, bars and beaches will re-open in Italy, while Spain has permitted some small shops to function.

Greece reopened the Acropolis in Athens, along with high schools, shopping centres and mainland travel.

Rising oil prices and comments from Fed Chair Jerome Powell also helped underpin investor sentiment.

In remarks aired on CBS’s “Face the Nation”, Powell said the United States would have a slow recovery from what he called the “biggest shock that the economy’s had in living memory.

Survey data from IHS Markit showed that UK household finances remained under severe pressure in May.

The Household Finance Index, which measures households’ overall perceptions of financial well-being, came in at 37.8 in May, up only slightly from April’s eight-and-a-half year low of 34.9.

The pound rose to 0.8909 against the euro, from a 1-1/2-month low of 0.8959 set at 5:30 pm ET. The next likely resistance for the pound is seen around the 0.86 level.

After dropping to near a 2-month low of 1.1730 at 5:15 pm ET, the pound edged higher to 1.1798 against the franc. The pound is seen finding resistance around the 1.28 level.

The pound appreciated to 1.2132 against the greenback, reversing from near a 2-month low of 1.2075 seen at 5:30 pm ET. The pound is likely to find resistance around the 1.26 level.

The pound moved up to 130.15 against the yen, following a decline to near a 2-month low of 129.30 at 5:15 pm ET. On the upside, resistance is likely seen near the 135.00 level.

Data from the Ministry of Economy, Trade and Industry showed that Japan’s tertiary industry activity declined for the second straight month in March.

Tertiary industry activity decreased 4.2 percent month-on-month in March after easing 0.7 percent in February.

Looking ahead, U.S. NAHB housing market index for May is due out in the New York session.