A strengthening Greenback put pressure on an already weak Sterling yesterday, causing Cable to go below the 1.4000 handle. The US Dollar Index (DXY), which tracks the performance of the US dollar stands higher at 91.92 with 0.05% gains. The US Dollar moves in tandem with the US 10-Year Benchmark Yields, which read at 1.51%. Market participants shrugged off the weaker Initial Jobless Claims data as the growth prospects overshadowed the poor readings. On the other hand, the sterling remained unfazed by the reports that the extended lockdown could end two weeks earlier on July 5.
EURUSD made a loss on Thursday starting he session at 1.1994 but quickly came under heavy selling pressure, forcing to close at 1.1941.
GBPUSD started Thursday at 1.4003 and dropped all the way down to 1.3950 at the close.
GBPEUR in contrast opened the session at 1.1670 and was able to make subtle gains by the close of the session, ending the day 1.1683.
On the UK data front, UK inflation rose more than expected in May to the highest level since July 2019 and above the Bank of England’s (BOE) target of 2.0%. In the latest development, the latest Reuters poll of 67 economists showed that UK Central Bank would keep its monetary policy unchanged ahead of next week’s BOE interest rate decision.
Meanwhile, UK relations with the EU worsens over the Northern Ireland protocol. The UK has asked EU to extend the grace period for chilled meat exports, as it will be banned at the end of June under the terms of the NI Brexit agreement. This, in turn, sour the sentiment around the cable.