The Pound was on the defensive on Thursday as further concerns around the economy took hold of investors.
This followed a survey from the Confederation of British Industry (CBI). It indicated significant concerns around labour shortages that are causing problems for businesses. Furthermore, the supply chain issues are also adding to the pressure, indicating that this could slow down the economic recovery in the UK. At the end of trading, the currency closed at 1.1655 against the Euro and 1.3702 against the US Dollar according to the Foreign Exchange Market.
The Euro nudged lower yesterday as the strong negative correlation with the US Dollar weighed heavily on the single currency. Furthermore, the appeal of the Euro was also limited following the publication of the European Central Bank’s July policy meeting which saw it take a dovish stance. The relationship with the US Dollar could dictate the direction of the Euro today.
It was another strong day for the US Dollar as it reacted to comments from James Bullard, the Federal Reserve policymaker. He suggested that sceptical inflation will moderate in 2022 and called for the Fed to end tapering its bond purchases by the Q1 of 2022. However, the gains made were limited as US data indicated that US GDP came in lower than expected.