Sterling has begun the week on a weaker note hurt by a flow into “safe haven” currencies in view of an increasing spread of the delta variant and its impact on the global economic recovery. The UK recorded 26,750 new cases in the latest figures published yesterday.
The European Central Bank is likely to announce plans to reduce its pandemic bond purchases in the next quarter according to a Reuters poll of economists, most of whom expect the programme to be wrapped up by the end of next March. With the Eurozone economy growing at a fast pace and inflation set to rise, pressure is building on the central bank to taper its Pandemic Emergency Purchase Programme and they are expected to discuss this at next month’s meeting.
The dollar has recovered slightly in morning trading after falling sharply on Friday afternoon. The greenback’s falls on Friday came following the release of the Michigan consumer index. Largely fuelled by concerns about the delta variant, the sentiment report plunged from 81.2 in July to 70.2 in August. That marked the seventh largest decline on record and its lowest reading since 2011.