25/03 – Stock falls keep USD strong

Jeremy Thomson-Cook
Jeremy Thomson-Cook 25 March 2021

GBP: Vaccine issues remain

EUR: Single strength

USD: Bond auction at 5pm


Sterling has remained relatively upbeat in the past 24hrs given the moves in equity markets but looks decidedly unsure as to its next move. As we have noted countless times in recent weeks there are as many reasons for expecting GBP weakness as there is GBP strength at the moment and the market seems to be unsure as to which argument to listen to first.

A joint statement between the UK and EU on vaccine sharing seems to have taken some sting out of that story. The joint communication read  “Given our interdependencies, we are working on specific steps we can take — in the short-, medium- and long term — to create a win-win situation and expand vaccine supply for all our citizens.”

The proof will be in the pudding as they say but sterling will remain tied to risk.


The confusion over a German lockdown and its cancellation has not roiled the euro too much, with weaker PMIs globally not hurting the single currency either. The euro should be able to continue to hold onto its haven status for now but will need vaccine progress to make higher highs.

US dollar

Trade weighted USD, the strength of the dollar against every other currency out there, rose to its highest level in 2 weeks yesterday as stock markets slipped. Tech shares were the main focus of the selling with companies that did well during lockdown taking the brunt of the selling pressure.

The strength in the USD comes despite dovish rhetoric from the Fed Chair highlighting the need to keep interest rates low in order to build the US economy back towards full employment.

Today’s bond auction at 5pm will be closely watched as it was this length of bond that upset markets last month and caused a huge lower in the USD. It may be too much to expect the same to happen today.


Oil prices recovered somewhat yesterday as traders bet on supply constraints caused by the blocking of the Suez canal by a stricken container ship. Even amidst the USD strength of yesterday, CAD & RUB managed to eke out a gain alongside the NOK. With experts saying the ship may not be on the move until next week, commodity prices might remain supported for a while.

Market rates

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

Euro €1.159 ↑
US dollar $1.369 ↓
Australian dollar $1.801 ↑
South African rand R20.44 ↓
Japanese yen ¥149.8 ↑

Have a great day everyone.