RationalFX: Sterling was on the front foot on Wednesday as optimism grows that all Covid-19 restrictions will be lifted on June 21.
The pound had dropped earlier this week amid concerns the date could be pushed back.
Despite rising infection rates, the government believes the vaccines are keeping people out of hospitals and controlling the spread of the virus. Prime Minister Boris Johnson has said he can’t see anything in the data to suggest the UK won’t lift the remaining restrictions later this month.
The UK recorded zero Covid deaths on Tuesday for the first time since the pandemic began. This caused conservatives to call for the end of lockdown, in spite of scientist warnings around a third wave.
The European Central Bank (ECB) will not change the total size of its asset purchase programme at its June 10 meeting. However, it will start tapering its pandemic purchases later this year.
Calls for winding down emergency purchases have increased in recent weeks, with an economic recovery gathering pace and rising price pressures. But a decision to reduce purchases at next Thursday’s policy meeting isn’t likely, several ECB members have said. Instead, they will look through higher inflation expectations for a while before they act, viewing them as transitory.
Some economists think May’s jump in eurozone inflation won’t be the end of the upward trend. Most of the rise is due to temporary factors, including higher energy inflation, and some are expecting the headline rate to drop back to well below the ECB target next year.
The eurozone growth outlook has been upgraded slightly, with the consensus pointing to 4.2% average growth this year and next, up from 4.1% for both the years predicted last month. With the increasing easing of coronavirus restrictions, and economic activity picking up along with the vaccination rollout, the eurozone’s economy is likely to recover in the second half of this year.
09:00 -EUR- Final services PMI
Forecast at 55.2 from previous 55.1
09:30 -GBP- Final services PMI
Set time remain unchanged at 61.8
13:15 – USD – ADP non farm employment change
Forecast at 645k from previous 742k
13:30 – USD – US unemployment claims
Forecast at 400k from previous 406k
15:00 -USD – ISM services PMI
Forecast at 63 from previous 62.7
Source : ETFWorld.co.uk