USD: Fed plays down inflation concerns
Sterling: holding on to the major support levels
EUR: Lacklustre day due to public holiday
The pound has done well to stave off pressure as various health officials have called on the government to reconsider its reopening roadmap due to concerns of new variants of COVID-19. Though, this morning the UK’s Vaccine Minister has stated that the roadmap for Monday “remains in place because the vaccines are delivering.” With no data out from the UK, the pound will be at the mercy of movements mainly from the US dollar this afternoon.
The Eurozone comes back from a public holiday today and there are no data releases due today. As such, we may well see another quiet day from the single currency.
In a recent Reuters poll the economic growth outlook for the zone remained at the lowest expected rate since early in the pandemic at 4.1% , however the poll also suggested that many thought the worst is likely over for the eurozone. Thus, in a longer term view, market will likely look for some recovery to help boost the single currency.
The Fed delivered two messages in a speech by Governor Waller yesterday; firstly, that the US was continuing to make a strong recovery despite the weak jobs report and secondly that the high inflation report yesterday was due to only temporary factors and the accommodative monetary policy will be maintained for some time. Today we will await US retail sales, which are expected to be very positive and could reignite a rush towards the US dollar.
The Bank of Canada’s Governor, Tiff Macklem suggested that the central bank is closely monitoring the recent gains in the loonie to ensure the currency strength, in part due to higher commodity prices, doesn’t become a “headwind” on the Canadian export projections. The Canadian dollar moved lower following the comments.
Today’s interbank rates at 09:20 against sterling. Movement vs yesterday.
|US dollar||$1.406 ↑|
|Australian dollar||$1.816 ↓|
|South African rand||R19.85 ↑|
|Japanese yen||¥153.7 ↓|
Have a great day and weekend everyone.