GBP Cable Set to Snap 3-Month Losing Streak
GBP Cable Set to Snap 3-Month Losing Streak FxSignals.
Investing.com – The pound rallied against the dollar Thursday, putting it on course on to snap a three-month losing streak, but history suggests cable is in for tough month ahead.
GBP/USD rose 0.96% to $1.2584
"May is the worst month for GBP/USD with an average decline of 2.3% since 2010," Bank of America (NYSE:BAC) said.
May, historically a risk-off month, will likely benefit the safe-haven dollar, analysts said.
The sunny end to the month for sterling comes even as sentiment has been soured by signs the U.K. is set for a protracted lockdown relative to its European peers, including Italy, which has been among the worst hit from the virus.
The U.K economy has come under pressure following government-imposed lockdown measures to contain the Covid-19 pandemic.
“It is clear the COVID-19 crisis will lead to a sharp fall in GDP in Q2 2020, perhaps by around 12% to 16%," said PwC chief economist John Hawksworth.
The lockdown in the U.K. is set to be reviewed on May 7.
The uncertainty around whether the U.K and EU will be able to find common ground and agree a trading relationship before the end of Brexit transition period on Dec. 31 has also weighed on sentiment.
“There are plenty of minor technical details where we could find solutions. But on the fundamental goals each side is trying to achieve - the differences are enormous. Things cannot move without a political push. And it’s missing," Reuters reported, citing one diplomat following the negotiations.