GBP / USD fell as BoE Governor Bailey appeared open to negative rates, but recovered with better than expected PMI data, said Yohay Elam, an analyst at FXStreet.
“Negative interest rates now seem imminent as BoE Governor Andrew Bailey told members that he changed his mind on the subject during the pandemic. The governor’s change of heart weighed on the pound. “
“Time is running out before the EU and the UK can agree to extend the transitional period beyond the end of the year, and perhaps the last-minute public feud will be replaced by intense videoconferencing to reach an agreement. However, the current lack of good nature adds to the pressure on the pound. ”
“Markit’s preliminary purchasing managers’ indexes for May have rebounded from devastating April figures and have even exceeded expectations. The manufacturing PMI rose from 32.6 to 40.6 and the services PMI more than doubled, going from 13.4 to 27.8 points. ”
“Unemployed claims in the United States are expected to decline again, although they remain in the millions. Markit’s PMIs are likely to rebound in the service sector, similar to the United States. Perhaps the most interesting data point on Thursday is sales of existing homes in the United States, which will show the effect of the coronavirus for the first time. “