GBP - British Pound
The UK is beginning to face unexpected Brexit repercussions just a week after the MEP finalised the post-Brexit trade deal. France were opposed to the deal last week and have suggested that their European counterparts should re-consider the approval of the deal. It has also been reported that Biden will actively dismiss any UK-US bumper trade deals and put them on the 'back burner'.
As nothing official has been mentioned publicly, the pound has not yet reacted to the news, however as GBP/USD was struggling to break $1.30 before the Brexit deal was finalised, these roadblocks could seriously knock the pound in the short term. The UK is looking to strengthen ties with Australia and India, which is positive news for the British currency.
In other news, the Bank Of England is scheduled to meet on Thursday, for the first time since restrictions have been lifted in the UK. The Monetary Policy Committee are expected to keep policy unchanged, however in the face of consistent economic improvement, the committee may decide to hike rates sooner than expected. The pound could remain fairly muted on the vote, but may well move on the tone of Andrew Bailey's economic rundown.
With consistently improving economic data in the US, Robert Kaplan, like many others, has suggested that the Fed should begin to look at tapering economic policy. Positive PMIs, GDP and Personal Spending data have all been seen recently. This is a large reason why the USD finished off last week strongly.
Fed chair, Jerome Powell, has openly disagreed and expressed his stance on the US recovery. He suggested that employment data is not yet where it needs to be and it will be a while before they are in a position to raise US interest rates.
The Eurozone struggled in the first quarter of the year, as it entered a double dip recession once again. Economists believe the Eurozone will be amongst the sharpest recoveries globally and that there is over EUR 170bn readily available in consumer savings, ready to spend once lockdowns have been lifted, which could have a positive impact on the euro.