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Sterling supported by positive retail sales

Daily Currency Update

Additional positive signs in the UK economy were seen last week as data showed UK consumer confidence jumping in May and regaining the ground lost during the pandemic. It highlights that the British public are willing to spend, now faced with reduced restrictions. GBPUSD broke the 1.42 handle and GBPEUR tested 1.1650 on the news, however both retraced lower over the reminder of Friday.
It’s a very quiet week for UK economic data, with the only data of note coming tomorrow in the form of Public Finances (PSNCR) for April.

Key Movers

The US dollar traded close to its lowest level in three months against the euro last week. The dollar index, measuring the dollar against a basket of six currencies, is hovering around 90.045 today, just slightly higher than the three-month low of 89.646 set on Friday.

The key data release for the dollar is on Thursday in the form of Prelim GDP for the quarter. The euro continues to perform well against the US dollar as economic sentiment picks up within the zone. The vaccine rollout is pushing ahead and countries like Spain, Germany, France, Sweden and Holland are all beginning to ease lockdowns and Covid restrictions.

Expected Ranges

  • GBP/USD: 1.4105 - 1.4230 ▲
  • GBP/EUR: 1.1580 - 1.1650 ▲
  • GBP/AUD: 1.8250 - 1.8360 ▲
  • EUR/USD: 1.2160 - 1.2240 ▲