Market report: pound set for strong few weeks
The pound looks set to stay well supported against the dollar and euro for the next few weeks. The vaccination rollout, easing of restrictions and growth of the UK economy have all contributed to the pound’s rise from the start of the year until now.
This means the Bank of England could even look to raise interest rates by next year. which would be further good news for the pound.
All UK lockdown restrictions are set to lift on 19th July, providing the data says it’s safe to do so. If they were to be lifted earlier than expected that would be especially beneficial for the pound. However, Primer Minister Boris Johnson has said a review will take place before making any decision.
Before that, the pound could be set for a volatile week leading up to Friday’s non-farm payroll data release. The last two releases have helped sterling edge higher against the dollar as data came in below expectations on both occasions. Investors will be watching that release closely.
The dollar benefited from safe haven flow and gained on Monday as a number of regions in Asia struggled with a rise of Delta variant cases.
The greenback remains in a tight range ahead of a closely watched US jobs report. The Federal Reserve is placing great emphasis on the recovery of the labour market before easing monetary policy.
14:40 – EUR – ECB President Lagarde speaks
15:00 – USD – Consumer confidence – Forecast at 118.9 from previous 117.2
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