27/05 – Cummings and Covid combine

Jeremy Thomson-Cook
Jeremy Thomson-Cook 27 May 2021

GBP: Sterling off the highs

EUR: Euro speakers to emphasise weakness

USD: Brief uptrend


An explosive testimony from the former Chief Advisor to Boris Johnson combined with rising Covid-19 case numbers yesterday to ensure sterling had an uneasy session.

While the former will rumble on in the papers until the key players themselves give evidence to parliament, the virus picture in the UK has started to worsen. Hospital admissions saw a big jump yesterday and strain on the NHS remains the key metric of concern. For now, it is low and we will have to hope that packed trains and offices are balanced out by the vaccine drive.

The full reopening on June 21st is looking ever more uncertain and sterling is starting to reflect that.

News overnight that Scotland will look to hold an independence referendum after the pandemic has not moved things.


A rebound in USD strength has taken EURUSD below the 1.22 mark but we think that this is a temporary rebound in the USD more than euro weakness. Granted, speakers from the Eurozone have been quick to acknowledge that stimulus is not being reduced anytime soon.

US dollar

We have anticipated short-term spikes in the USD as part of the current downtrend. Yesterday began one of those. Until the Federal Reserve begins chatting about tapering – something that we think will not happen in a meaningful manner until the end of August – the dollar should remain on a downward trend.


Price action has been relatively subdued this week and with a little bit of USD strength, emerging market currencies are having a negative session. With lower volatility however, we do not expect this to continue as investors continue their search for higher yields and higher returns.

Market rates

Today’s interbank rates at 08:23 against sterling. Movement vs yesterday.

Euro €1.157 ↑
US dollar $1.412 ↓
Australian dollar $1.821 ↑
South African rand R19.34 ↓
Japanese yen ¥154.1 ↑

Have a great day.