GBP

PM Boris Johnson yesterday admitted to three major flaws in his Brexit deal with the European Union conceding it was a huge mistake to enable Brussels to determine the future trading status of Northern Ireland. Sterling traded lower on the day across a broad range of currencies, hitting weekly lows against the US Dollar and Euro as UK covid cases continue to rise. UK May GDP came in this morning below consensus at +0.8% (expected +1.5%) attracting early selling interest. Technically, key support is not seen against the Dollar until 1.3600, 1.3750 has so far held this week. Against the Euro 1.1600 offers strong support.

USD
With risk aversion dominating Thursday’s session following the ECB’s acknowledgement of inflation potentially rising, the US Dollar had a mixed session. Weaker against the Euro, firmer against the Pound. Medium term, Dollar strength persists for the time being. US Wholesale inventories for May are released at 2pm with the Fed Reserve monetary policy report at 4pm.

EUR
The ECB confirmed a move away from the central banks previous inflation forecasts, now targeting “below but close to 2%”, also adding that there will be further incorporation of climate change considerations into their monetary policy framework. The Euro as a result recovered across the board on this news, closing just below key resistance of $1.1850. ECB chief Legarde speaks today at 10.00am with the ECB’s accounts/minutes release due at 11.30am.