Pound Sterling

Pound (GBP) Rises as UK PM Says UK is ‘Set Fair’ for Lifting Remaining Covid-19 Restrictions on 19 July

Pound News: Sterling Rises as UK ‘Set’ for Easing Lockdown Restrictions in July

The Pound (GBP) rose today after Prime Minister Boris Johnson said that the UK is now ‘set fair’ for the lifting of the remaining Covid-19 restrictions on 19 July.

Boris Johnson commented:

‘You will be hearing a statement from [health secretary] Sajid Javid in the House later on this afternoon about where we are in the pandemic, the steps that we are going to be taking. I think we are looking set fair for 19 July.’

With the new health secretary, Sajid Javid, saying he was committed to easing lockdown restrictions next month in a manner that is irreversible, Pound investors have become more confident about the outlook for the UK economy.

However, Covid-19 infections continue to rise across England, leaving many Sterling investors feeling cautious as these could provide an obstacle to the easing of lockdown restrictions.

Looking ahead, Pound investors will be monitoring Tuesday’s release of the latest UK housing data, with any signs of increasing mortgage approvals indicating a recovering economy.

However, the latest Manufacturing PMI – due out on Thursday – and comments from the Bank of England’s Governor, Andrew Bailey, will be in key focus this week.

Could dovish comments from Andrew Bailey, however, see the Pound begin to fall against its peers?

Euro News: Single Currency Fluctuates Despite Growing Confidence in Eurozone Economy

The Euro (EUR) fluctuated today because of an absence of any notable Eurozone economic data.

However, with the outlook for the Eurozone economy continuing to improve – with last week’s data supporting confidence in the bloc’s recovery – we could see the single currency head higher this week.

Chris Williamson, the chief business economist at IHS Markit, commented on the latest Eurozone PMI data:

‘The Eurozone economy is booming at a pace not seen for 15 years as businesses report surging demand, with the upturn becoming increasingly broad-based, spreading from manufacturing to encompass more service sectors, especially consumer-facing firms.’

Looking ahead to this week, the European Central Bank’s (ECB) President, Christine Lagarde, is set to deliver a speech on Tuesday.

Could hawkish commentary about the state of the Eurozone economy boost the Euro exchange rate?

US Dollar News: Could Souring Risk Sentiment Uplift the Safe-Haven ‘Greenback’?

The US Dollar (USD) fell today following last week’s dovish rhetoric from the US Federal Reserve. Fed Chair Jerome Powell said that lift-off for the US economy ‘is well into the future’, while the US employment crisis remains a key issue.

Patti Domm, CNBC Markets Editor, commented on the Fed’s statement:

‘It appears to be a material shift in how the Fed sees the risks around inflation. That’s how I read it. It shows the Fed sees upside risks to inflation and that has presumably followed through to the dot plot.’

US Dollar traders will be eyeing Wednesday’s release of the latest US ADP employment change data for June.

Any indications that levels of unemployment in the US remain a major problem would be USD-negative.

However, if global risk sentiment continues to sour because of rising Covid-19 infections in Asia-Pacific, then we could see demand for the safe-haven ‘Greenback’ begin to pick-up.

Canadian Dollar News: Commodity-Linked ‘Loonie’ Benefits from Rising Oil Prices

The Canadian Dollar rose today as rising WTI crude prices – which rose to highs of around $74 per barrel – has bolstered demand for the oil-linked ‘Loonie’.

In absence of any notable Canadian data until Wednesday, we could see the Canadian Dollar continue to head higher as demand for oil increases.

Looking forward, Wednesday’s Canadian GDP data for April could weaken the Canadian Dollar exchange rate, however, with the figure expected to fall to -0.9%.

Australian Dollar News: ‘Aussie’ Struggles as Australia’s Covid-19 Infections Rise

The Australian Dollar (AUD) suffered today as Covid-19 infections – including the Delta variant – increase throughout Australia, including Sydney.

In addition, however, ‘Aussie’ investors have become more optimistic about the outlook for the Chinese economy, with the latest Chinese industrial profits growing by 83.4% in May.

With China being Australia’s largest trading partner, this bodes well for the nation’s economic recovery in the months ahead.

Looking ahead in the week, Thursday will see the release of the latest Australian trade balance figure for May. Could an improving outlook for the domestic economy boost the Australian Dollar?

Data Releases

07:00 GE Import Price Index (May)

09:10 EU ECB’s Panetta speech

14:00 US Fed’s Williams speech

15:00 EU ECB’s De Guindos speech

15:30 US Dallas Fed Manufacturing Business Index (Jun)

18:10 US Fed’s Quarles speech