Weekly Market Report: 13th – 17th September 2021

Monday 13th September -It was a slow day for the Pound on Monday after a shortage of data meant that there was a lack of directions or the currency.  However, Sterling did face some headwinds in the form of the increasing number of Covid cases as well as the newly announced increase in National Insurance, both of which kept a grip of the currency. There may be better news for the Pound today as the unemployment rate dropped and job levels have reached pre-pandemic levels. At the end of trading, the currency finished at 1.1718 against the Euro and 1.3839 against the US Dollar according to the Foreign Exchange Market.

 

The Euro initially lost ground yesterday although it did pick up during the afternoon, taking a sideways move as market mood improved. This resulted in a drop in the appeal of the US Dollar which gave the single currency a much-needed boost.

It was a strong start to the day for the US Dollar although with a rise in risk appetite, it lost some of those gains. The change in direction came as a result of a Deutsche Bank Survey that highlighted optimism among investors following a strong recovery this year.

Tuesday 14th September

On Tuesday, the Pound climbed during the early part of trading following news that more jobs were available and that employment had reached pre-pandemic levels.

However, as the afternoon arrived, those gains had been lost following new Brexit concerns after a delay to checks on EU imports. This resulted in fears that UK exporters are unable to compete as a result of red tape and additional costs. This saw the currency end up at 1.1698 against the Euro and 1.3806 against the US Dollar according to the Foreign Exchange Market.

The early session yesterday proved challenging for the Euro with incoming inflation figures from the US leaving investors holding on any decisions they made. However, the single currency made a recovery after the US CPI failed to meet forecasts.

It was a mixed session for the US Dollar yesterday as it increased prior to the release of US inflation data. However, once the data had been released, it slumped before recovering those losses. Core US inflation eased more than expected, dropping to 4% from 4.3% year-on-year and this didn’t impress investors although a risk-off mood did help to give the Greenback a boost.

Wednesday 15th September

On Wednesday, the Pound experienced a day of wavering movement although it did manage to make gains by the end of trading.

It was announced that inflation had surged to 3.2% and this was put down to low base effects of the Eat out to Help Out campaign from last August while rising prices also limited the gains that were made. According to the Foreign Exchange Market, the Pound finished at 1.1719 against the Euro and 1.3852 against the US Dollar.

The Euro was a little less fortunate yesterday as it trended lower against many of its rivals and even a rise of 1.5% in industrial output couldn’t help to bolster the single currency. Despite this figure beating forecasts, it seems as though investors had other ideas and this saw the currency edge lower during the afternoon.

The US Dollar was mainly range bound yesterday as it was influenced by a mixed market mood and resistance following the poor CPI release on Tuesday. During August, US core inflation eased month-on-month which put an end to hopes that the ongoing high inflation would force the Federal Reserve to tighten monetary policy.

Thursday 16th September

On Thursday the Pound lost ground against both the Euro and the US Dollar, rounding off the day at 1.1727 and 1.3797 respectively, according to the Foreign Exchange Market.

This came following the news of a UK energy crisis as rising gas prices forced businesses to close as a result of becoming unprofitable. This placed a real dent in the Pound forcing it to stumble as investors lost faith in the currency. A drop in retail sales today might also add some additional pressure to the Pound today.

The Euro started the day on shaky ground as it struggled against a stronger US Dollar. Despite this, it managed to recover during the afternoon following an unpublished inflation estimation from the European Central Bank which indicated that a rate increase could be likely in just over two years.

During trading yesterday, the US Dollar soared as investors opted to take fewer risks and so, they took haven in the currency. Retail sales had surprisingly increased which provided some support for the Greenback while domestic sales also increased which was better than expected, adding to the support that the currency had already received.

Friday 17th September

The Pound rounded off the end of last week on the back foot after a drop in retail sales placed pressure on the currency on Friday.

The data showed that there had been a contraction in the growth of sales and that resulted in concerns about the strength of the economy in the UK. As a result, the currency finished the day at 1.1719 against the Euro and 1.374 against the US Dollar according to the Foreign Exchange Market.

It was also a challenging day for the Euro after the release of the consumer price index in Europe. This indicated that the final figures for August showed that inflation had reached a 10-year high which was followed by the European Central Bank announcing that the 2% inflation target might not be held.

The US Dollar strengthened at the end of the week, following a rise in US treasury yields, which helped to bolster the Greenback. However, any gains were limited as the University of Michigan published consumer sentiment data which indicated that US consumer morale had only increased slightly about the 10-year low seen in August.

 

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