Sterling hits fresh high against Euro

Hi everyone,

So on Friday we saw the Pound recover from a few days of losses and we mentioned the start of this week would be volatile, as the month and quarter both come to and end. Well it couldn't have started any better for Sterling with a clear 0.5% jump so far in today's trading. With no major news released this morning, we believe positive sentiment has lifted the £ today. Fitting really, as today the UK begins the lifting of restrictions..

GBP-EUR has hit a fresh 13-month high and GBP-USD is at a 1-week high, but is overall very favourable. As the UK begins its roadmap out of lockdown, we expect traders to price in £ strength both near & long term as the economy opens up. Whether or not those positions have been placed today (hence why the Pound has risen), we will find out in the next 48-hours. 

Late last week, an agreement had been reached by Brussels & London on financial services cooperation. Whilst not yet signed, the document states both sides will create the framework for regulatory cooperation and create a regulatory forum for dialogue on financial services matters. The sector was left out of Brexit talks, but financiers hope the text can be finalised soon and that London can once again dominate the trading volume in Europe. 

Regardless of negative vaccine news in the media at the moment, the market is more focused on the UK hitting new milestones. The Government is on course to meet its target of offering a first dose to the top 9 priority groups in 2-weeks time and all adults by the end of July. Europe on the other hand is being squeezed on two-sides and will undoubtedly soon start to aid in £-€ prices. Vaccine supply & rollout and a third-wave of Covid-19 leaves the EU way behind the UK and the € should begin to lose more value as the gap widens. 

With two 4-day weeks coming, economic data is cramped and makes for some busy days ahead. This week belongs to the EU with important figures released daily over the next 3-days. Consumer confidence is big data at the moment, as well as inflation and so we could be in for a yo-yo kind of week.

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