GBP

Sterling traded with a softer tone on Friday. Not helping its cause was a combination of Matt Hancock’s resignation as health minister, the Bank of England ‘dovish’ statement (Thursday) and a rise in the Delta variant. Although there has been a modest recovery in Asian markets, we still open below the pivotal $1.3900 level on broad based Dollar strength and relatively unchanged against the Euro having traded either side of EUR 1.1650. There are today, raised expectations of a smooth unlock of covid restrictions due to the previous working relationship between new health minister Sajid Javid and Chancellor Rishi Sunak. Traders/investors await the latest UK GDP data due for release on Wednesday.

USD
The Dollar has held onto moderate gains as market focuses on US inflation over the medium term. Data highlight this week will be non-farm payrolls on Friday as stock markets recovered most of their losses despite the Federal Reserve hawkish statement of last week (the NASDAQ hitting record highs).

EUR
The Euro found sellers above 1.1950 last week and opens just a tad lower. German inflation data for June (CPI) will be released on Tuesday.