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Pound rises to 1.3950 against Dollar

Pound rises to 1.3950 against Dollar

GBP

The news that the UK Electoral Commission would investigate the funding of the refurbishment of Downing Street had limited market impact as was offset by vaccine optimism and economic recovery hopes. The political uncertainty did limit immediate demand for Sterling and it approached 1.3900 to the Dollar it did hit selling interest. Also concerns over next week’s Scottish elections kept the Pound confined to narrow ranges and the Euro settled near 1.1500 again.

After the Fed meeting in the US, the Pound did muster some gains on the Dollar but it under-performed compared to the commodity currencies and was little changed against the Euro. 

This morning the Pound opens near 1.3950 to the Dollar and 1.1500 to the Euro in favourable risk conditions.

 

USD

The Federal Reserve held interest rates at 0.25% following the latest meeting and also made no changes to the asset-purchase programme. Both decisions were in line with consensus forecasts and the votes were unanimous.

According to the statement the coronavirus pandemic is causing tremendous hardship across the US and world. It did, however, add that indicators of economic activity and employment have strengthened amid vaccination progress and strong policy support. Sectors most adversely affected by the pandemic have shown improvement.

The US dollar remained vulnerable on Thursday amid expectations of sustained negative real rates, although it did recover slightly from two-month lows.

 

EUR

The EUR eased from multi-day highs of 1.2150 overnight, and now trades around the 1.2120 heading into Thursday’s European session with the market somewhat cautious ahead of Germany’s key inflation data due today. 

 

Data to watch

13:30 – USD – Advance GDP

13:30 – USD – Advance GDP price Index

13:30 – USD – Unemployment Claims 

15:00 – USD – Pending Home Sales 

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