The pound has started the week off on the front foot as it hit its highest levels in July so far, making another attempt at fresh highs since April against both the euro and dollar.
With the UK set to reopen on July 19th, the pound seems to be benefitting from the resumption of economic activity. Covid numbers and an increase in the the hospitalisation rate will of course be a downside risk for the pound as well as any changes in course by the government or a new assessment by the Bank of England.
Moves on the Euro were subdued yesterday in the absence of any real data. The key theme for the euro over the short term will continue to be news of the spread of the Delta variant in Europe with France, Netherlands and parts of Spain all announcing new restrictions to curb the contagion.
The US will be in firm focus this afternoon with the release of June’s inflation figures. Expectations are for inflation to drop to 4.9% from May’s 5% print. Key takeaway will be how much of the price rises are attributed to the reopening of the economy and which ones are persistent and warrant action by the Fed.
Today’s Interbank Rates at 09:07 against sterling. Movement vs yesterday.