Sterling remains on the defensive
Sterling remained on the defensive yesterday and the Dollar retained the upper hand as investors bought Dollars as a safe haven amid concerns around the spread of the delta variant. GPUSD traded in territory not seen since February as it briefly hit a low of 1.3572, and the EURGBP also continued to rise to May’s peaks at 1.1535 (0.8669). AUD continues to fall and heading for its longest run of losses since September amid a weaker-than-expected retail sales print and stricter covid restrictions. An improvement in risk appetite allowed the equities markets to recover some losses but most currencies were held within tight ranges.
Today is another “data-light” day apart from UK Mortgage Applications. The European Central Bank begin a 2-day meeting which could potentially be a heated affair as they discuss how to hit their 2% inflation goal. The EU rates decision will be presented tomorrow. Also it’s rumoured that due to the deadlock on the Northern Irish Protocol Lord David Frost will announce a UK plan to abandon nearly all checks on the Irish Sea transactions.
Sterling opens this morning at 1.1574 to the Euro and 1.3615 to the Dollar.
Here are some highlights for the week:
Wednesday: BoJ minutes, Japan trade balance; Australia retail sales; UK public sector net borrowing; Canada new housing price index.
Thursday: Australia goods trade balance, NAB quarterly business confidence; ECB rate decision; US jobless claims, existing home sales.
Friday: Australia PMIs; UK Gfk consumer confidence, retail sales, PMIs; Eurozone PMIs; Canada retail sales; US PMIs.