IFX Market Report: Wednesday 2nd June 2021

Despite reaching fresh 2-year highs against the US Dollar early in the session, The British Pound was the worst performing G10 on Tuesday, losing ground against both the Euro and USD. Sterling’s early decline was triggered by a “downward revision of the UK Markit Manufacturing PMI, which resulted in 65.6 in May from 66.1”. This, coupled with positive manufacturing activity in Eurozone, enabled the Euro to mark its 3rd consecutive day of gains. The Euro’s strong start to the week is due to “a boost in the manufacturing activity in both the EU and particularly in Germany. Germany’s manufacturing sector grew by 64.4, while business activity in the EU’s manufacturing activity grew by 63.1”.

GBPUSD started Tuesday well, opening the day trading at 1.4227. Cable took a turn to the downside rather quickly, falling below the 1.42 handle. The pair went on to finally close at 1.4173.

GBPEUR also made a significant loss yesterday. The pair started the day at 1.1637 and closed at 1.1573.

Limited demand for the Dollar in yesterday’s session allowed EURUSD to make further gains on the day. The pair started the session at 1.2225 and closed at 1.2246.

Yesterday was the first day (since the pandemic began) that the UK has announced zero COVID-19 deaths. It is important to note that “because no deaths were announced on 1 June does not mean for certain that no deaths actually occurred. Often the figures are revised once death certificates are examined for precise details of date of death”. However, what is clear, over the last 3 months, death rates, the number of people being admitted to hospital and catching the virus “have all gone steadily in the right direction – down”.

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