The pound could have a subdued week
Tuesday 27 April, 2021
Daily Currency UpdateGBP - British PoundAfter a week of positive data last week for the pound there will be very little data for the pound this week with no Bank of England officials due to speak. With the lack of market data to be released focus may turn to new infection and hospitalisation figures that will be forthcoming as an indication for just how successful our vaccination programme has been so far. Ultimately this new information will be a key driver in dictating market optimism about whether our economic recovery will continue on the path that it has been on. Deputy governor of the BOE Bill Broadbent was quoted over the weekend saying that the economy is likely to experience ‘very rapid growth over the next couple of quarters’ fuelled by what is likely to be increased consumer spending. A recent Ernst Young report is forecasting the UK economy to grow by 6.8% in 2021 - which if it materialises will be the fastest rate of growth since the second world war. The obvious driver for this again has been cited as the UK's so far successful vaccination programme with more than 46 million people receiving at least one shot of the vaccine already - amounting to 65% of the adult population with a further 12 million having received both shots of the vaccine.
Key MoversUS stocks opened up higher yesterday before cutting back on gains made. DOW Jones jumped 100 points before backing off to a 0.2% gain. The S&P 500 also defended a 0.1% advance and the NASDAQ just about clung on to a fractional gain. Despite concerns over the worsening covid situation in India, there was still overall optimism towards covid recovery within the US yesterday. European commission president Ursula Von Der Leyen told the New York times that Americans who have received the vaccine should be in a position to travel to Europe by the summer. The Greenback remained under some selling pressure yesterday with a cautious stance being taken by investors as they await this week’s US data releases and the FOMC meeting scheduled for Wednesday along with Q1 growth data. US president Joe Biden is due to speak on Wednesday for the first time in front of a joint session of congress and his $2.25trillion infrastructure spending and a lack of post Brexit trade deal between the UK and EU is also expected to weigh on GBP/USD rates.Yesterday morning we saw German IFO business climate data come in lower than expected at 96.8 vs a forecasted 97.8. This indicates a minor blip in the German rebound as lockdowns across the country continue. Yesterday's IFO index likely reflects a combination of delayed lockdown impact going against the hopes of reopening. We saw EUR/USD reach its highest level in two months yesterday climbing to 1.2116 amid an overall sense of optimism around Europe with falling covid cases, before finishing the day at 1.2086.
- GBP/USD: 1.3840 - 1.3910 ▼
- GBP/EUR: 1.1480 - 1.1545 ▲
- EUR/USD: 1.1965 - 1.2020 ▼
- GBP/AUD: 1.7720 - 1.8010 ▼