Sunak's 18-month record for the highest Pound to Euro ratio
EU trails in economic recovery

Sunak’s 18-month record for the highest Pound to Euro ratio EU trails in economic recovery

Although the pound was just above its two week highs against USD, comments made Monday by Rafael Bostic, Atlanta Fed president, and Eric Rosengren, Boston Fed president, increased the odds that the U.S. central banks would begin tapering before the end of the year or sooner. Sterling’s performance has been good in recent weeks due to a drop in COVID-19 case numbers, which has enabled the British government and Eric Rosengren from Boston to relax most social-distancing regulations. Last week, the Bank of England (BoE), suggested that it may gradually reduce stimulus.

Barclaycard data showed that British consumers spent more in July than they did pre-pandemic. This was 11.6% higher than the previous year. According to the British Retail Consortium, July saw a 6.4% increase in retail spending compared with year-ago levels.

At 1015 GMT the Pound was at 84.575 Pence. This is an increase of 0.2 percent from the previous February.

After the ZEW survey revealed that investor sentiment in Germany had declined for the third consecutive month in August, it rose even more.

After three consecutive months of gains, the pound gained 0.8 percent against the euro in August.

Since July 8, the euro plunged 1.4 percent against USD and 1.8% against the pound, when the ECB announced a strategic review committing itself to boosting inflation.

Currency traders now pay more attention to which central banks unwind the stimulus from the pandemic era.

Currency traders now pay more attention to which central banks unwind the stimulus from the pandemic era.

Societe Generale analysts stated that the dollar was the clear beneficiary of the focus on the rate-hiking cycle at least within G4 currencies.

For now, the pound gains some support from the possibility of the UK’s MPC increasing rates before it ends quantitative easing.”

They predicted that the soft ZEW data would continue to put pressure on the euro and “euro/sterling may fall further”.

The pound was almost constant against the dollar at $1.3856. This is just below the $1.38370, which was the lowest level since July 27, 2007.

Analysts believe that the sterling-dollar rate is being driven by dollar movements, and there’s a possibility of another fall if Loretta Mester (Cleveland Fed President) strikes a hawkish tone later in the afternoon.

More to come

Publiated at Tue 10 August 2021, 11:40:13 (+0000).

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