As we head into the weekend the GBP/EUR rate remains just above the previously mentioned support line although a somewhat lack lustre affair. Overall the trend has been modestly negative since early to mid August. The focus has shifted from the Coronavirus pandemic for the moment where the UK appeared to be a world leader for the vaccination program. In fact, watching most major news networks yesterday evening, Covid wasn’t mentioned once which feels like a first for an awful long time.
Therefore, other than European Retail Sales data out this morning, there’s little to make the rate move in our opinion. However that can turn on a sixpence with any global news story.
The GBP/USD rate is a better story (depending on which direction you’re exchanging) as the Pound continues to strengthen. This is almost certainly a reaction to the risk off approach we had seen during the recent Afghanistan situation when traders moved to the perceived safety of the Dollar. Therefore Sterling appears to be reversing some of those losses.
Looking ahead, besides the European Retail data it’s a typically US driven day with the highlight being the Institute for Supply Management’s PMI out this afternoon. However it’s Labor Day in the US on Monday so the markets will be shut over there.
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: 14:00 ISM PMI data