Just as Europe starts it summer holiday, last week saw some interesting developments on markets with swing between optimism and pessimism, despite worries over the spread of the delta variant ebbed and flowed.
We ask is Sterling going to deliver again? After a week that saw consistent buying of the dollar, encouraged by mid-week rebalancing needs, there was a bout of profit-taking on Friday despite the US Labor Department’s employment data strength.
Currencies continued to trade in the familiar tight ranges for most of last week as the markets awaited the US Consumer Price Index (CPI) for May, which, reported the highest core inflation figure for 30 years.
The most recent non-farm payroll report came in at a slightly disappointing level and encouraged sellers of the dollar to reappear. With employment in the US rising at a lower than expected 559,000, the pace of the recovery in the US and their subsequent tightening of economic policy is starting to be questioned by investors.
With UK showing signs of normality, the currency markets continued to worry last week about the impact of this on inflation and whether Central Banks will be too tardy in their response.
In what was holiday-shortened week saw sterling gain against the dollar above $1.4025, where it has opened this morning, we look how at inflation could see upbeat in UK currency as restrictions begin to ease.
Last week saw the first signs that an economic recovery is underway in the UK were seen on busy high streets and roads last week and in figures released by the Office for National Statistics (ONS).
Last week, England returned to two of its favourite occupations last week, shopping and socialising over a drink, as lockdown measures were eased; as a result pound also fared well against the euro, despite a midweek dip, it gained half a euro cent over the week.
Last week got a long overdue trim over other currencies hard-won gains to finish the week at nearly two and a half euro cents lower than it started. The worries over the danger to health from the Astra Zeneca vaccine came to the fore almost simultaneously with Europe showing a more coordinated approach to vaccination.