Both Sterling and the Euro capitalized significantly as the Dollar experienced yet another day of decline. After a tough week last week, and an uninspiring Monday, the Greenback “plummeted as US Federal Reserve officials reaffirmed the commitment to maintain their ultra-loose monetary policy, despite rising inflationary pressures”. Meanwhile, “US Treasury yields remain unchanged on a daily basis, weighing on a potential Dollar’s demand”.
The Pound’s surge against the Dollar can also be attributed Tuesday morning’s UK Labour report, showing “employment picking up and the unemployment rate falling, beating market expectations.” Although the figure remains below the 772K pre-pandemic levels, “according to the Office for National Statistics (ONS), the jobs market is showing some early signs of recovery, with the number of payroll employees increasing for the fifth consecutive month.”
GBPUSD impressed on Tuesday reaching highs not seen since February last year. Cable opened the session at 1.4166 and closed the day at 1.4210.
GBPEUR in contrast made a loss yesterday despite Cables advances. The pair started at 1.1644 and finished the day at 1.1630
A weaker Dollar enabled EURUSD to surpass the 1.22 handle and maintain that position by the close. The pair opened the day at 1.2166 and closed at 1.2218.
On the data front, today is yet another important day for Britain. April UK Inflation figures were due at 07:00 in the form of Core Inflation Rate YoY, Inflation Rate YoY and MoM. The Eurozone will also be releasing their Final Core Inflation Rate, with an estimate of 0.8%. Then in the evening, from across the pond, the FOMC Minutes will be released at 19:00.