Sterling was weaker on Friday, enabling both the Dollar and Euro to capitalize as markets transitioned to a more ‘risk-off’ environment. Despite COVID-19 cases rising above 50,000 at the weekend – the highest figures since 15th January – lockdown restrictions have ended in England as of today. Chief Medical Advisor Professor Chris Whitty has issued the warning that the UK is “not out of the woods yet” as cases appear to double (roughly) every 3 weeks. Whitty went on to note that hospital admissions could reach “scary numbers”. As cases have spiked, businesses are being forced to operate with considerable staff shortages as more than 500,000 people have been told to self-isolate by the NHS COVID-19 app. In spite of record cases, more than 46.1M people in the UK have had their first dose of a COVID-19 vaccine. 67.5% of UK adults are fully vaccinated having had both jabs, while 87.6%, more that 35.5M, have had their first dose.
Cable started the Friday session well opening at 1.3827. GBPUSD began to make upside moves in the early stages of the session “backed by comments from BoE officials, who hinted at reducing their assets purchase program sooner than anticipated”. Sadly for Cable bulls “speculative interest took” this rumour “with a pinch of salt” and the rate depreciated as the session was coming to a close. The pair closed below the 1.38 handle, finishing the week at 1.3790.
GBPEUR also experienced significant downside pressures as the Pound diminished. The pair opened the session above 1.17 opening at 1.1710. But as the day progressed Sterling grew weaker, and the pair closed the week at 1.1677.
EURUSD maintained its rangebound trend again on Friday. The pair opened the session at 1.1808 and closed just 1 pip above at 1.1809.
On the data front it’s a light schedule with almost no notable events. At 11AM BoE member Haskel will be giving a speech. Then across the pond at 15:00 the US will release July’s NAHB Housing Market Index.