The rally seen for Sterling this week stalled somewhat following Thursday’s news that the Indian strain of Covid had more than doubled during the last week. These are concentrated in parts of the North West and London ahead of next week’s easing of lockdown. The government and scientists are confident however that the spread can be contained by emergency vaccinations. The Pound in response has still held above $1.4000 & €1.1600 despite this small correction lower across a broad range of currencies.

The US Dollar rally seen this week on above consensus inflation readings held overnight in Asia. Yesterday’s US producer prices also confirmed inflation is rising at a faster rate. This initially supported the US Dollar as did the rising tensions in the Middle East between Israel & Palestine. However, with stock markets recovering 50% of the losses seen in the last 48 hours, Dollar sellers have re-emerged this morning.

The Euro this week has traded either side of the €/$ 1.2100 pivotal level. Recent economic data from mainland Europe continues to under-perform that of the UK and USA for the time being.

Opening Interbank Levels
GBP/USD 1.4053
GBP/EUR 1.1618
EUR/USD 1.2096