Analysts predict UK spike in cases
Wednesday 2 June, 2021
Daily Currency UpdateGBP - British PoundThe main story for the pound remains the potential delay to the easing of COVID-19 restrictions in the UK. Government advisers claim they are faced with a conundrum, whereby cases are rising, whilst hospitalisations and deaths are not. Analysts are predicting a sharp spike in cases over the coming days after a bank holiday where so many travelled. The pound gains are limited after 2 months of performing very well against its major peers. GBP/USD increased by 2.65% in May and 0.3% in April, however, has been very range bound over the past two weeks. If Boris Johnson confirms that the June 21st date is to go ahead as planned, expect a rally in GBP based currency pairs.
Key MoversThe US Institute for Supply Management (ISM) claimed on Tuesday that there are supply shortages due to a lack of parts and labor. This led to a slip in the US dollar as the ISM went on to claim that supply growth is hampered by these factors. Many have questioned the current appetite to work manufacturing jobs in the US at present, particularly after the shocking April non-farm payroll result. Investors are currently fixated on Friday, as Fed chair Powell is expected to speak and the May employment figures are released. With two such important events in one day, it is likely we will experience some US dollar volatility.Analysts state that back in January, the European Central Bank had a 54% of a 10 basis point cut in the interest rate by December 2021, however this is now close to 0%. Despite the recent worry for inflation, the ECB have stated that they will not overreact and that it is not the right time for a rate change. This will continue to weigh on the Euro.
- GBP/USD: 1.4040 - 1.4265 ▼
- GBP/EUR: 1.1510 - 1.1670 ▼
- GBP/CAD: 1.7010 - 1.7170 ▼
- GBP/AUD: 1.8180 - 1.8485 ▼