Sterling stages mini recovery
To those in the UK right now, ditch the duvet, sheet on, sheet off, leg in, leg out, turn the pillow…still hot. Sound familiar? Anyway, enough of the weather, the poor souls in Germany have it much worse. Our hearts go out to you.
As mentioned yesterday, the Pound seemed to find its lowest ebb and eased back into a mini recovery. GBPUSD is back above $1.37 but not by much. GBPEUR is up a cent to €1.1625. If the Pound were a patient, the Doctor would say, ‘She’s stable but she’s not out of the woods yet’.
It is less of a Sterling story and more of a US Dollar one. The EURUSD rate is evidence of that. EURUSD is half a cent up on yesterday’s low and sits at $1.18 this morning. Having been the safe-haven of choice (alongside the Japanese Yen) for the last week, US Dollar buyers finally seem to be taking some profit.
It is a similar story in the GBPCAD rate. A dip yesterday to CAD 1.7150 was followed by a GBP recovery to Cad 1.7265 this morning. That followed a mediocre rise in Canadian house prices of 0.6% in June. That was less than last month’s and a little lower than expected.
ECB and US housing dominate the day.
Today’s news stories are dominated by the European Central Bank’s interest rate decision and the statement that accompanies it, plus the US existing home sales. The ECB is highly unlikely to make any immediate changes but their expectations of the timing and pace of higher rates and lower QE are the keys to the Euro’s performance. Well, that and the level of covid infections across Europe. Until the pandemic is under better control, all the macroeconomic analysis in the world is a guessing game.
The US existing homes sales data is a very good bellwether for US consumer sentiment. After all, people don’t invest in houses unless they believe they can afford the long term commitment. We are expecting 5.9 million sales completions. Anything more will be positive for the USD.
That’s about all there is to say about 22nd July 2021 other than that it is International Hammock Day. So, I will see you later. Can I have a Tom Collins and some peanuts when you wake me at noon, please?