IFX Market Report: Monday 2nd August 2021

This week is likely to be an important one for Sterling as investors eagerly anticipate the Bank of England’s latest policy decision on Thursday. In recent weeks, Sterling has been dictated by domestic and global COVID-19 cases. But as cases in the UK fell last week, market sentiment improved, and the Pound has been able to strengthen. Many, including the UK Government, have said the reason for the drop in cases is the “phenomenal achievement” of the vaccine roll-out. While on Sunday the UK reported 24,470 new COVID-19 cases, it also hit a landmark of over 85M vaccines administered. The data shows that more than 68% of 18 to 29-year-olds in England have had a first jab, while 88.6% of all UK adults have had one. In light of the momentous achievement, Vaccines Minister Nadhim Zahawi reiterated the government’s message that people should get both jabs in order to “carry on doing the things we’ve missed”.

Cable lost some ground on Friday but was able to maintain itself above the 1.3900 handle. GBPUSD started the day at 1.3940 and closed the week at 1.3906.

GBPEUR also made a loss on Friday. The pair opened the session at 1.1734 but closed below that mark at 1.1726.

It was a similar case for EURUSD. The pair opened Friday at 1.1879 and closed the week at 1.1859.

On the data front, it’s PMI day. Starting 08:55 July’s German Manufacturing PMI will be released, forecasted to come in at 62.6. Then 5 minutes later at 09:00, the Eurozone will release their latest numbers. The Eurozone is also forecasting 62.6 with a previous of 63.4. At 09:00 the UK’s Markit/CIPS Manufacturing PMI is released, forecasted at 60.4. Then in the afternoon, the US will be releasing their Markit Manufacturing PMI and ISM Manufacturing PMI from 14:45.

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