12th July - Weekly FX Update

GBP/EUR: Monday 9:00 UTC 12th July: 1.16762

The UK economic recovery slowed in May, with growth coming in at 0.8%. Moreover, renewed Brexit concerns and surging Covid-19 cases capped off gains for the Pound last week. Brussels and London are locked in a dispute over the size of the UK's Brexit bill, with the EU suggesting Britain are obliged to pay €47.5bn for its post-Brexit arrangements. ECB board member Isobel Schnebal also attempted to calm any concerns, stating Eurozone inflation will not become excessively high, and low interest rates are temporary. Investors will be keeping an eye on UK data this week, where we will see inflation figures Wednesday and employment data on Thursday.

GBP/USD: Monday 9:00 UTC 12th July: 1.38611

The Pound dropped to 1.37 against the Dollar last week after the Federal Reserve meeting minutes were published on Wednesday. It confirmed that bond-buying could be tapered somewhat earlier than anticipated, as divided officials discussed an uncertain future. However, heading into the weekend, the Pound rallied and by Saturday it had reached 1.39. These gains were capped with renewed Brexit concerns and a surge in Covid-19 cases. US consumer inflation figures are due Tuesday, along with Fed Chair Jerome Powell's testimony on Wednesday and Thursday.

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