The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
Meanwhile, the pound opens this week’s session on firm footing, with GBP/EUR buoyed at €1.1619 and GBP/USD stable at $1.4108. GBP/CAD is steady at C$1.7092, while GBP/AUD and GBP/NZD have rallied to AU$1.8178 and NZ$1.9540, respectively.
Coming up, will the opening of more of the UK economy lend support to Sterling today?
What’s been happening?The US dollar closed last week’s session on the defensive, with the ‘Greenback’ facing aggressive selling in the wake of the latest US retail sales release.
These revealed that sales growth completely stalled last month, missing forecasts for a 1% expansion and plunging from 10.7% after March’s figures were artificially inflated by the distribution of US stimulus checks.
This pullback in the US dollar directly benefitted the euro thanks to the negative correlation between the pairing.
Reinforcing this upside in the euro were the minutes from the European Central Bank’s (ECB) most recent policy meeting, as policymakers’ expectations that the Eurozone will return to growth in the second quarter offset the bank’s warning over ongoing risks.
At the same time, the pound was subdued on Friday amidst renewed concern over the spread of coronavirus variants in the UK.
This followed a press conference from Boris Johnson in which he warned that the Indian variant poses a potential threat to the final phase of reopening on 21 June.
What’s coming up?Turning to the start of this week’s session, we may see the reopening of more of the UK economy help to buoy the pound as hopes increase for a strong rebound in economic growth in the second quarter.
For USD investors, the focus will be on this month’s Empire State manufacturing index, which may offer some support to the US dollar this afternoon if factory activity in the New York region remains robust.
Finally, the euro could face headwinds in the first half of this week’s session, as the Eurozone’s latest GDP figures are set to confirm the bloc slumped into a recession at the start of 2021.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)