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Continued Concern Over Delta Variant Pressures Markets

Continued Concern Over Delta Variant Pressures Markets

As we get the week underway after the UK bank holiday, the only real noteworthy movement yesterday was a slightly softer tone to USD. Data-wise, there were also no major surprises with the EC Economic Sentiment Index printing broadly in line with predictions. However, the continued concern surrounding the Delta variant is likely to be a factor in the services index falling from 19.3 to 16.8. Although neither release impacted the euro yesterday.

As markets open this morning, the main pairs remain at very similar ranges to 24 hours ago. EUR/USD starts just ahead of the $1.18 mark. EUR/GBP is trading in the upper half of 85-86p once again and GBP/USD remains up at the $1.38 mark.

As we look ahead to today, the Euro-area wide measure of HICP inflation is set for release. The headline HICP is forecast to rise to 2.7% from 2.2%. The ex-food & energy rate is projected to jump to 1.5% from 0.9% also. If these releases meet or even exceed predictions it could give some strength to EUR. In the US, the consensus is that consumer confidence is set to fall for the first time since December, this could offer some risk to USD over the following days.

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