The lack of any ‘hawkish’ tone in the Bank of England statement yesterday saw Sterling give back its gains having also left policy unchanged (as expected). Yet again, failure to break the EUR 1.1700 zone against the Euro saw sellers return across a broad range of currencies following the BoE news. The Pound also lost ground against the US Dollar as $1.3900 remains pivotal ahead of US inflation data later today. British tourists to EU countries could now be faced with quarantine when they reach their destination as EU leaders appear to back Angela Merkel’s call for coordinated restrictions as the UK Delta variant cases continue to rise.

Despite the Federal Reserve’s hawkish tone last week, the US Dollar failed to make any extended gains and has since traded on the weaker side this week as stock/indices recovered. Today’s release of the latest inflation data for May (PCE, core price index) will be closely monitored by investors.

German business confidence readings beat expectations yesterday as the Euro holds above the $1.1900 zone.