Updated: May 21
The Pound yesterday failed to breach the 1.37 mark on GBP/USD and we saw the currency give back some of its post Brexit gains to settle in the mid 1.35's. Likewise we saw GBP/EUR fall from the high 1.11's back into the 1.10 range. With Brexit now concluded the focus will turn more onto the economy itself with a slew of data out of the UK this week. All eyes will be on how badly effected the services and construction sector have been in the recently months to give a view for where the Pound will go from here. Starting yesterday the UK plunged back into a full scale lockdown with the Covid case count still rising. The new variant of the virus is rapidly increasing case numbers to the highest in the EU and the government are betting on roll out of 2 million vaccine shots per week to end the lockdown. Chancellor of Exchequer Rishi Sunak is expected to again announce today more help for struggling businesses. Michael Gove has also hinted that the UK borders could be closed to all non essential inbound international travel, a move that the government has been hesitant to make up until this point.
The USD rebounded of new lows yesterday with the Dollar strength indicator jumping from 89.4 to hit 89.9 towards the end of the day. President Donald Trump is still holding onto claims of voted fraud with him now pressuring Georgia Secretary of State to come up with the 12,000 votes needed to overturn Biden’s victory in the state. This move has backfired as the Secretary of State recorded the call which was then later leaked to the Wall Street Journal and Washington Post. Today we have the Georgia Senate Runoff taking place. The fear in the market being that the Democratic candidates win both seats and control the US Senate. This will allow Chuck Schumer to control the senate agenda allowing President-elect Biden to push through several new legislation pieces.
In other markets Bitcoin dropped almost 7% to hamper the recent eye watering gains that the cryptocurrency has posted. Gold saw a bumper day with the precious metal reaching 1945$ per ounce. The FTSE saw a sell of on the new lockdown measures and the S&P 500 ended the day 1.5% down.
Have a good day!
Funding Routes Team