Currency Note

Pound recovering ahead of busy week for data

By Christopher Nye June 28th, 2021

After weakening on Thursday and Friday due to the Bank of England’s policy announcement, the pound is showing signs of recovery against the euro and the dollar this morning.

This comes ahead of a busy week for economic data releases in the UK, EU and US. There will also be speeches from several central bank officials throughout the week, including ECB President Christine Lagarde and BoE Governor Andrew Bailey on Tuesday and Thursday.

The new Health Secretary, Sajid Javid, will update MPs later on when COVID-19 restrictions will be lifted in England. The statement will take place at 15:30.

The Prime Minister has said previously that restrictions could be lifted on July 19, with a review to see if they can be eased two weeks earlier on July 5.

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GBP: Pound showing signs of recovery

The pound is still weaker against the euro and the dollar after the Bank of England’s monetary policy meeting last week but appears to be showing signs of recovery this morning.

Sterling weakened on Thursday evening and Friday morning as investors were expected a more ‘hawkish’ message from the BoE. Although it lifted its inflation forecasts, nothing was said about when interest rates might be hiked.

Bank of England official, Andy Haldane, is due to speak later today and could comment on the outcome of the meeting last week. Governor Andrew Bailey will speak on Thursday.

It’s a busy week ahead for economic data releases for the UK, with house price figures to be released tomorrow, GDP on Wednesday and Manufacturing PMI on Thursday.

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EUR: A busy week of data ahead

The euro is mostly steady against the dollar this morning ahead of a busy week of data releases.

Sentiment figures will be released for the Eurozone tomorrow, as well as inflation data for Germany. This will be followed by inflation data for the Eurozone on Wednesday and PMI figures for both Germany and the Eurozone on Thursday. All data will reveal more about how the European economy performed in June.

There will also be several speeches from European Central Bank officials this week, including two speeches from ECB President Christine Lagarde on Tuesday and Thursday.

USD: Non-Farm Payrolls this week

The dollar is steady against the euro and the pound this morning. A relatively busy week of data releases lies ahead for the US, culminating in Non-Farm Payrolls on Friday.

The Non-Farm Payrolls data is expected to show that the US economy added 675,000 jobs in June, higher than last month’s figure of 559,000. If the number falls short of expectations, this could impact the dollar.

Also this week, Manufacturing PMI data for the US will be released, as well as jobless claims figures. There will also be speeches from several Federal Reserve officials.

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