The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
The political furore surrounding the prime minister’s chief advisor and UK scientific advisors warning against easing lockdown too soon gave investors little cause for confidence.
Demand for the pound weakened further as Beijing threatened retribution if the UK extended visa rights to Hong Kong citizens, sparking fears of fresh trade disruption.
A sharp decline in April’s UK car production figure added to the bearish mood, highlighting the extent of the challenge still facing the economy.
It’s likely Brexit will drive GBP exchange rates this week as the UK and EU hold their latest round of talks.
Confirmation that the UK services PMI remained deeply in contraction territory in May could also keep GBP exchange rates limited this week.
Unless the index sees a positive revision the odds of a major second quarter economic contraction are likely to limit the appeal of the pound on Wednesday.
Even if the corresponding construction PMI bounces back from the record low seen in April this is unlikely to offer any significant boost to GBP exchange rates.
Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.