It appears the weakness displayed by the Pound over the last week was more of a technical correction than anything to be fundamentally concerned about. This is to be expected after a fairly decent run in Sterling strength over a period of time.
The goods news is that the weakness appears to have slowed up now with a nice recovery in the early part of this week against most of the majors.
From a news perspective the ongoing pandemic news generally still dominates headlines with moves now towards localised hotspots in the UK and the prospect of a booster jab being needed as more data comes out. The good news from a UK perspective is that the de-coupling between cases and hospitalisation seems to be continuing indicating the vaccination program is being successful.
Of course all the headlines are currently Afghanistan related and the looming deadline of the end of the month. However, other than a potential move to the Dollar as a perceived move to safety, the reality is there should be little effect on global fx rates now that the initial shock has been priced in.
Looking ahead today there’s a good bit of data out from the US including Durable Goods Orders later today and the Jackson Hole Symposium tomorrow. The latter being a meeting of central bankers run by the Kansas City FED.
As ever we look forward to keeping you in the loop and look out for our next update.
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Today’s Economic Calendar
US: 12:30 Durable Goods Orders