Good morning,

Yesterday saw a slow start to the week as we had a non-trading day for the US dollar while 4th of July celebrations were underway. The market seemed to be happy to wait to hear what Boris Johnson’s 5pm press conference had to deliver. Expectations were that Covid-19 restrictions in the UK would be lifted from 19th of July and the pound began to lift again to recover the losses from later last week This move continued overnight to have cable approaching 1.39 again although some of these gains have fallen away at opening this morning. The UK’s daily Covid-19 case numbers are still increasing since the last round of restrictions were lifted with over 28k daily cases now seen again. This is limiting the pound’s upside to further restrictions easing.

Overnight Australia held interest rates at 0.10%. The latest Covid outbreak in Australia will bring caution for the RBA, and they also announced it’s plans a further round of quantitative easing to avoid any major slowdowns of its economy.

Today see’s more data releases from both the EU and the US. EU retail sales for May will be confirmed for both YoY and vs the previous month. Retail sales vs April should come in with a significant jump higher so watch for any EUR movement today here. The US services PMI for June will also be released. It will have a tough time beating May’s reading of 64 but is likely to see another strong expansive reading. A more market sensitive US monetary policy report is due out tomorrow afternoon as well.

Have a great day.

Chris Allan, Senior Relationship Manager

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