Sterling Gains Dependent On Rising Fears
Sterling will attempt to recover this week from recent lows but any gains depend on the rising fears about how the UK is being left behind in the return to normality. Sterling’s rebound which has largely been driven by the success in the vaccine rollout is in danger of fizzling out as both the US and EU are beginning to ‘open up’ quicker than the UK. The British government’s decision to delay the end of lockdown from June 21st to the end of July will likely continue to cause Sterling weakness as we head through the summer.
From a rates point of view, GBP/USD started off yesterday at 1.38 but managed to push up and close near the 1.3940 mark. Similarly, GBP/EUR opened at 1.1635 only to rise to highs of 1.1695. The EUR/USD continues to trade within a range of 1.1845 and 1.1925.
Looking forward to today, US home sales figures for May and the flash Eurozone EC consumer confidence index for June are the highlights from the data calendar. However, neither release is expected to generate much impact on their respective currencies. Meanwhile, Fed Chair Powell’s testimony before Congress today which should receive some USD attention.
TUESDAY, JUNE 22
14:00 EUR Consumer Confidence(Jun) PREL
18:00 USD Fed’s Chair Powell testifies
23:00 AUD Commonwealth Bank Services PMI(Jun) PREL
23:00 AUD Commonwealth Bank Manufacturing PMI(Jun) PREL
23:50 JPY BoJ Monetary Policy Meeting Minutes