GBP: Sterling hopes

EUR: Softer on inflation changes

USD: Job numbers remain crucial

Sterling

I’m trying to not make jokes about sterling and Raheem Sterling. It is tough, but I haven’t seen sterling fall as quickly as he did for the penalty since the night of the Brexit referendum.

Joking aside, the pound is in a quiet place this morning; a little lower against the dollar following yesterday’s Fed minutes and higher against some of the commodity currencies.

Governor Bailey speaks tomorrow and could offer some further dovish thoughts on the UK economy given his speech at the Mansion House.

Euro

Leaks from the European Central Bank’s monetary policy strategy review overnight suggest that the Frankfurt policymakers are happy to let inflation run higher than the 2% target as opposed to the current policy of ‘close to, but under’. This is an announcement that should, in time, allow for further pressure on the euro. 

USD

Far from being a bullish war cry for the US dollar, last night’s Federal Reserve minutes suggested a central bank that is lot more patient about tapering asset purchases and tightening interest rates than the June meeting may have initially led us to believe.

So, what next? Focus must fall on the jobs numbers this afternoon as well as the continual spread of the delta variant in the United States that could prompt further dollar buying if investors start to believe we are headed for another dip.

Elsewhere

China’s central bank has cut the reserve requirement ratio in the country in a bid to stimulate lending to Chinese SMEs. Such a move goes to show that the path of monetary policy globally is not always heading in one direction. We will have to keep an eye on further concerns from China if the global recovery trade is to continue.

Market rates

Today’s interbank rates at 08:24 against sterling. Movement vs yesterday.

Euro	€1.166 ↓
US dollar	$1.376 ↓
Australian dollar	$1.852  ↑
South African rand	R19.83 ↑
Japanese yen	¥151.4 ↓

Have a great day everyone.