GBP/USD: Three reasons why cable has room to rise on Monday

GBP/USD has been extending its gains as the dollar remains on the back foot. According to FXStreet’s Analyst Yohay Elam, sterling has three reasons to stage a recovery.

Reopening hopes

“The UK recorded over 24,000 cases of COVID-19, most of them of the highly contagious Delta variant. However, as hospitalizations have risen only modestly and deaths remain depressed, Prime Minister Boris Johnson is set to remain on course with the July 19 reopening. Will he change his mind like so many times in the past? Anything can happen in the next two weeks, but optimism is supporting the pound on Monday.”

Data

“Markit's Services Purchasing Managers' Index beat was upgraded from 61.7 to 62.4 points in June, reflecting robust growth. An upbeat outlook about Britain's largest sector is good news for sterling.” 

Brexit truce

“The EU and the UK and the decision to postpone a row over sausage trading between Great Britain and Northern Ireland until September. The lingering issues related to the divorce will likely haunt the pound for a long time, but probably not throughout the summer.”