Daily Currency Update
GBP - British PoundSterling continued to be put under significant pressure yesterday as we traded back towards recent lows of the 1.37 handle on GBPUSD and 1.15 on GBPEUR. It was a combination of factors this week that have causes sterling to weaken. Concerns over AstraZeneca’s vaccine in relation to blood clots, the pace of the vaccine rollout slowing, all combined with the US and Europe increasing their pace of vaccination have all caused Sterling to push lower this week. On a positive note for sterling, the UK have announced a traffic light system in order to restart international holidays on May 17th. Countries will be rated with a traffic light system according to their Covid-19 risk factor. We do not yet know which countries will be placed in which category, however this should give the travel industry a major boost.
Key Movers
In Europe we had the European Central Bank minutes yesterday, the ECB had a slightly optimistic tone on the economic outlook and came with some hawkish comments to the asset purchases programme. The market impact was insignificant however it is interesting that it will take a significant worsening of the risk appetite for ECB to step up purchases. This means that right now it is more likely that ECB will have to end asset purchasing later this year rather than extend it. The euro had a strong week against the dollar, testing the 1.19 handle yesterday.
Expected Ranges
- GBP/USD: 1.3650 - 1.3760 ▼
- GBP/EUR: 1.1470 - 1.1550 ▼
- EUR/USD: 1.1835 - 1.1940 ▲