Euro hits one month dollar highs
German consumer prices increased 0.9% for May with the annual inflation rate strengthening to a fresh post-unification record high of 7.9%, higher than forecast. Inflation has also been equal to or above market expectations for the past 8 months.
Sterling edged higher to just above 1.2650 against the dollar but the Euro edged higher to near 1.1740. The Euro also strengthened to fresh 1-month highs near 1.0780 against the Dollar by the close of play.
The latest Lloyds Bank business confidence data recorded a net gain for May which will provide some relief, but overall confidence in the economy remains negative. This morning Sterling opens near 1.2600 against a firmer dollar with the Euro little changed, near 1.1740.
The renewed upside in the US Treasury Bond yields and lack of risk appetite will hand the advantage to the Dollar over the Pound as we move towards month-end. Euro inflation data is due at 10am and this afternoon a raft of US data including a meeting between Joe Biden and Fed Chair Powell. The lack of UK data or impetus leading into the long weekend could lead to a Sterling slump whilst we are eating cucumber sandwiches.