FX Market Report 09/06/21

The Chunnel

The British currency has grown more vulnerable over the weekend due to the rising cases of coronavirus in the UK. The latest data shows that cases have been doubling nearly every ten days, but the GBP is being shielded by the continuation of the vaccination programme. The GBP/EUR currently trades at 1.1620 whilst the GBP/USD exchange rate stands at 1.4156 at the time of writing.

UK Currency Strategist, George Vessey said, “A delay to the complete economic unlock by the UK government would be GBP-negative and the pound is already slipping against currency peers as a result.” In addition of the rising cases, traders are unsure whether the government will continue easing restrictions on June 21st.

If “freedom day” is delayed, all over-50s will be fully vaccinated by the new date. In turn, more vaccinated people will help better the economy and its recovery. “The UK economy is expected to bounce back strong this year, led by a vaccine-fuelled population unleashing records amounts of savings into the market. However, the government has yet to confirm the so-called final stage of the reopening strategy amid a threat of another wave of infections,” Vessey continued.


On the other hand, the GBP/AUD exchange rate has a spot rate of 1.8254, impacted by Australia’s slow vaccination rollout. The Aussie currency has been affected by the rollout as the country has become more vulnerable to the possibility of more lockdowns that will damage the economy. “Cyclical currencies are all benefitting from the re-opening of the global economy and the recovery in global trade. But some of these currencies are benefitting more than others depending on factors such as relative commodity export prices, trading partner growth, monetary policy and even vaccination rates, strategist Valentin Marinov said.

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