Good morning,
Yesterday we saw GBPUSD continue to build, briefly breaking the 1.38 mark, mostly driven by USD weakness. US inflation figures met expectation but many had hoped for a larger rally in April after strong March figures. GBPEUR fell to seven-week lows, analysts believe this is tied to the resignation of Andy Haldane, the Bank of England’s Chief Economist.
Haldane was known as a hawk, he had an optimistic outlook on the UK’s growth for 2021 and favoured raising interest rates which are key factors in strengthening GBP. Meanwhile EURUSD continued its bullish run towards 1.20, settling in just underneath at 1.1980.
The EU’s vaccination program continues to pick up pace and was boosted by the news that 50 million doses of the Pfizer vaccine will be available months earlier than expected. The UK has now passed 8 million second doses, continuing to show the speed of the roll out which is pinning up GBP, though a close eye will be kept on London, as some Boroughs are undergoing surge testing due to new cases of the Brazilian variant.
German CPI figures were eyed this morning, though came in as predicted and failed to add any fresh impetus to EUR. At 13:30 both retail sales and unemployment claims are released in the US, if these figures miss the mark, it could give GBP and EUR the opportunity to pass 1.38 and 1.20 respectively.
Have a great day
Thomas Read
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