Pound To Remain Upbeat As July Reopening Confirmed
Sterling is forecasted by analysts to remain upbeat amidst expectations for a continued recovery of the UK economy, largely encouraged by the removal of all Covid-related restrictions by July 19. The UK Prime Minister Boris Johnson confirmed on Monday, that the final unlocking of the UK will likely proceed on July 19, subject to final approval on July 12.
The lifting of all restrictions removes any remaining constraints placed on businesses and allows the economy to return to pre-covid levels sooner. Any subsequent benefits to business and consumer confidence would also to a degree be expected to aid the economic recovery, which is in turn largely supportive of the Pound.
As trading gets underway, moderate FX changes are reflected in the GBP/EUR opening near to the 1.1685 mark. Meantime, EUR/USD has edged back up towards the 1.19 threshold, while GBP/USD is changing hands just below the 1.3900 level.
Additionally, the Reserve Bank of Australia kept their interest rate on hold last night, and extended their QE programme beyond September, which leaves GBP/AUD trading at 1.8300. Turkish Consumer Price Inflation came in at 17.5% y/y, higher than expected, driven by food, furnishing and recreation & culture. The Central Bank of Turkey is now only expected to cut interest rates by 2.5% in Q4 2021.
Tuesday: Japan average cash earnings, household spending; RBA rate decision; Germany factory orders; UK Construction PMI; Germany ZEW economic sentiment, retail sales; US ISM services.
Wednesday: Australia AiG services; Germany industrial production; France trade balance; Swiss foreign currency reserves; Canada Ivey PMI; FOM minutes.
Thursday: Japan bank lending, current account, Eco watcher sentiment; Swiss unemployment rate; German trade balance; ECB meeting accounts; US jobless claims.
Friday: China CPI, PPI; UK GDP, trade balance, production; France industrial production; Canada employment.