GB Pound
Sterling struggled against the Dollar however it was better supported against the Euro.
Movements
GBPUSD opened at 1.3928 and gradually moved down to reach a low of 1.3730 (6-week low) on Friday. It then partly recovered to close the week at 1.3842 (-0.62%).
GBPEUR opened at 1.1663 and moved sideways all week, trading in a tight range (1.1610-1.1670), to close unchanged.
Movement rationale
Sterling came again under pressure last week, amid broad USD strength. The currency traded slightly lower at the beginning of last week as hopes for a US/UK travel corridor before the end of the summer were reportedly fading. The Pound then was relatively insensitive to Q1 final GDP print on Wednesday, which came slightly lower than expected, at -1.6%. The currency experienced a downward movement against the USD which continued into Friday as dovish comments from the Bank of England’s governor knocked the pound to its lowest level versus the Dollar since April 16th. On the other side, the UK currency was stable against the Euro last week, following the EU’s decision to grant a 3 months long extension to an exemption on customs checks on chilled meat shipments to Northern Ireland providing some support against the single currency.
Week ahead
A light UK economic data calendar includes the following:
Calendar
Friday 7am | Industrial Production (May), Gross Domestic Product (May)
US Dollar
The Dollar has had a strong week.
Movements
EURUSD began the week at 1.1941 and steadily depreciated to hit an 8-week low on Friday (1.1810). It then slightly recovered and closed at 1.1868 (-0.62%).
GBPUSD opened at 1.3928 and gradually moved down to reach a low of 1.3730 (6-week low) on Friday. It then partly recovered to close the week at 1.3842 (-0.61%).
Movement rationale
A generally negative market sentiment, fuelled by recent spikes in coronavirus cases across the globe linked to the Delta Variant, triggered a significant US currency demand last week. The USD recorded its biggest monthly rise since November 2016 and a three-month high against main rival currencies on Friday morning. The Dollar then lost some ground during the last trading session of the week, weighed down by somewhat disappointing US Job figures. The data for June indicated progress in the labour market’s recovery. The US economy added 850K jobs throughout the last month. However, the unemployment rate edged up to 5.9%, disappointing the market and triggering some Dollar depreciation.
Week ahead
In the US, the focus will be on Wednesday’s FOMC minutes, with the economic calendar including the following:
Calendar
Tuesday 3pm | ISM Services PMI (Jun)
Wednesday 7pm | FOMC Minutes
Thursday 1:30pm | Initial Jobless Claims (Jul 2)
Euro
The Euro was quiet.
Movements
EURUSD began the week at 1.1941 and steadily depreciated to hit an 8-week low on Friday (1.1810). It then slightly recovered and closed at 1.1868 (-0.62%).
GBPEUR opened at 1.1663 and moved sideways all week, trading in a tight range (1.1610-1.1670), to close unchanged.
Movement rationale
The Euro kept losing some ground to the Dollar, falling to a 2-month low as concerns over the Delta variant negatively impacted investor sentiment and put some pressure on the single currency. On the data front, Eurozone inflation declined marginally in June, dipping for the first time in 9 months and retracing slightly from a two-year high, due to slower growth in the price of energy and services.
Week ahead
A heavy Eurozone economic data calendar includes the following:
Calendar
Monday 9am | Markit PMI Composite (Jun)
Tuesday 10am | ZEW Survey – Economic Sentiment (Jul), Retail Sales (May)
Wednesday 10am | German Industrial Production (May)
Friday 11am | ECB's President Lagarde speech
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