IFX Market Report: Wednesday 9th June 2021

Cable dropped below 1.4150 on Tuesday due to growing fears over a possible delay in the UK’s reopening as a result of the rising cases of the Indian Delta COVID-19 strain. Concerns about the Delta variant of COVID-19 have been mounting for several weeks and is becoming an increasing downside risk to Sterling. This strain, first identified in India, is thought to be 40% more transmissible than the already fast-spreading Alpha, or Kent variant. Also, according to new studies, it may cause a wider variety of symptoms. Prime Minister Boris Johnson insisted that the fourth and final stage of Britain's reopening is on course to proceed on June 21 as scheduled. While Johnson seems to be intent on sticking to his roadmap, according to the Times, the government is mulling a delay of two weeks in the reopening, using the extra time to vaccinate as many people as possible. If there is delay in Britain’s reopening, it’s very likely this could seriously damage the Pound.

GBPUSD started the day at 1.4151 but soon found itself losing momentum quickly. The pair was able to regain some of its losses and finished the day at 1.4149.

GBPEUR also made loss on Tuesday, opening at 1.1620 and closing at 1.1611.

EURUSD in contrast was able to gain some upside on Wednesday, edging closer to 1.22. The pair started the day at 1.2178 but was able to close at 1.2185.

On the data front, unlike Tuesday there are only a few notable releases today. At 07:00 German Balance of Trade for April will be released, forecasted at €16.3B, with a previous of €14.3B. Then in the afternoon, from across the pond, US MBA Mortgage Applications and US Wholesale Inventories MoM will be released.

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