26th July - Weekly FX Update

GBP/EUR: Monday 9:00 UTC 26th July: 1.16826

The GBPEUR rate rallied last week after reaching lows of 1.15345 on Tuesday, as Covid-19 cases soared. The UK has since seen a dip in virus cases, after reporting a fifth-straight day of lower cases, which supported the Pound and will continue to do so in the weeks ahead. Germany will see the release of employment numbers and inflation on Thursday, where it is expected to see inflation leap to 3.2%. Currently, the GBPEUR exchange rate hinges on the same 1.17 level which has held up further advances for the past two months. While the UK economic calendar is scarce for this week, Covid-19 cases will play a big part underpinning the Pound.

GBP/USD: Monday 9:00 UTC 26th July: 1.37685

Recently, the brakes were put on the UK's strong economic recovery as a fresh wave of Covid-19 cases forced workers to self-isolate under strict government rules. After reaching lows of 1.3577 on Tuesday, the UK cases dropped sharply, and the government reported cases were down roughly 30% from the previous week. This propelled the Pound forwards and is now back accumulating above 1.37. The Dollar edged a little higher Friday, with investor attention now turned to the US Federal Reserve meeting on Wednesday. This should give some further indication on the direction of US monetary policy. The UK economic calendar is scarce this week, and will face resistance at 1.3805.