It’s been another rocky start for the pound with some noticeable losses against both the euro and the dollar. Both of which now seem to have stabilised somewhat, with GBP/EUR back trading at 1.1613 and the GBP/USD rate trading at 1.4133 at the time of writing. The driving factor behind this is speculation as to whether the UK will go ahead with the complete re-opening of its economy on June 21st as planned. A sharp increase in positive tests for the Delta Covid variant, which is reportedly up to 40% more transmissible than other variants has given many government officials cause for alarm.
Although senior officials have made it clear that they are not ruling out the possibility of delaying the easing of restrictions further, current sentiment seems to be that this may not necessarily have the negative impact on sterling that one would anticipate with UK GDP set to grow to between 5-6% in Q3. In the meantime, analysts eagerly await Monday’s announcement as to whether all social distancing restrictions and total re-opening of the economy will go ahead as intended on June 21st.
This morning sees Eurozone GDP data released for the first quarter of the year, with the European Central Bank meeting on Thursday also coming on to the horizon. Markets are currently cautious for the meeting as it will outline future monetary policy and the central bank’s policy moving forward.
Have a great day.
Holly Tobia-Parkyn, Relationship Manager.
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