IFX Market Report: Thursday 3rd June 2021

The Pound was uninspiring on Wednesday, recording another day of losses against the Euro as GBPEUR closed above the 1.16 handle. The Euro was able to gain momentum against a weaker Sterling even after Germany posted a lower-than expected Retail Sales figure, coming in at 4.4% but forecasted at 10.1%. While this number is very disappointing for the German economy, the data shows that “on a month-on-month basis, price-adjusted retail sales were 5.5% lower in April because of the virus-led lockdown”. The Euro received a boost last week with strong German inflation and employment data, “but those gains have been halted by the sluggish retail sales figures.”

Despite reaching three-year highs on Tuesday, GBPUSD had an extremely dull session yesterday. Cable opened the day at 1.4149 and closed at 1.4164. One economist has claimed that Cable’s losses are due to concerns over the new Indian strain of COVID-19 outweighing bets on the UK’s recovery.

GBPEUR was once again able to surpass the 1.16 mark on Wednesday. The pair started the day at 1.1585 and was able to finish at 1.1603.

EURUSD dropped closer to the 1.22 handle at the close yesterday after a good start to the week. The pair opened the session at 1.2213 and closed at 1.2207.

On the data front, at 09:30 the latest UK Markit / CIPS Composite PMI Final figures for May will be released. The UK Composite PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index; thus, many investors will be watching closely. It is forecasted to come in at 62.0, despite having a previous of 60.7. Germany, Italy, Spain and the Eurozone will also be releasing their latest PMI numbers this morning. Then in the afternoon, the US will release their weekly Labour report.

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