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Covid/Brexit Continue To Steer Sterling

Covid/Brexit Continue To Steer Sterling

Despite some range bound activity yesterday, it has been a fairly quiet start to the week. This was expected given the limited data released yesterday. The most interesting data from yesterday showed that German exports increased by 1.3%, continuing the growth for the 14th consecutive month –  suggesting exporters are somewhat unaffected by supply shortages.

As we get started today, GBP/EUR opens once again above the 1.1780 mark. EUR/USD is trading just below the midpoint of 1.17-1.18 and GBP/USD continues to change hands around the 1.3850 area. 

Looking to the day ahead, there is once again a relatively light data calendar. For the Eurozone, the German ZEW (Indicator of Economic Sentiment) is forecast to fall to 56.7 in August from 63.3 in July,as with the rest of Europe, concerns regarding the Delta variant are still hampering confidence. Meanwhile over the pond, the July reading of the NFIB Index of small business optimism is due…however, neither release is likely to affect the euro or the dollar. Once again the key driver for sterling is Covid and Brexit.

 

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