IFX Market Report: Wednesday 23rd June 2021

With the Greenback still under pressure, Sterling and Euro were able to make subtle gains in the Tuesday session. Despite Dollar weakness, a plethora of factors restricted any significant upside for the Pound. The main problem for Sterling is the British government’s decision to delay the final stage of easing lockdown measures – amid a surge in COVID-19 cases infected by the so-called Delta variant – dampen prospects for a rapid UK economic recovery from the pandemic.

Not only this, concerns about the UK-EU stand-off on the Northern Ireland protocol proved to hinder Sterling. In the latest developments, “Maros Sefcovic, a European Commission Vice-President, warned in a speech on Friday that a downward spiral in relations could ensue if Britain continues with unilateral action. Separately, British Brexit minister David Frost said that time is now very pressing if we are to find solutions together”.

GBPUSD opened the day just above the 1.3900 handle at 1.3905. With Sterling gains capped, the pair was only able to finish the day at 1.3916.

GBPEUR also improved on Tuesday. The pair opened the session at 1.1687 and closed at 1.1695.

EURUSD stated Tuesday hovering around the 1.19 handle at 1.1894. The pair eventually closed at 1.1899 but as the evening progressed went on to surpass the 1.1900 mark.

On the data front, at 09:00 the latest Markit/CIPS Flash PMI’s (Composite, Manufacturing, Services) figures will be released. Then in the afternoon, from across the pond, US Markit Manufacturing Flash PMI is expected to come in at 61.5, with a previous of 62.1. Fed members Bowman and Bostic will also be speaking.

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