GBP>EUR – 1.1550
GBP>USD – 1.3869
EUR>USD – 1.2011
GBP>CAD – 1.7589
GBP>AUD – 1.7884
GBP>SEK – 11.708
GBP>AED – 5.0951
GBP>HKD – 10.757
GBP>ZAR – 20.903
GBP>CHF – 1.2734
· EUR Consumer Price Index - Core (YoY)(Feb)
· EUR Consumer Price Index (YoY)(Feb)
· CAD Gross Domestic Product Annualized (QoQ)(Q4)
- GBP/USD falls below 1.39 amid speculation about the UK's budget
- USD/CHF jumps to the highest level since November 2020, eyeing 0.9200 mark
- Gold Price Analysis: Technical chart suggests a make-or-break moment for XAU/USD
- EUR/USD falls to 1.20 amid worsening mood, ahead of EZ CPI
The pound pegged a 12-day low against the dollar at 1.3866, and lost ground to the yen, though the UK currency held its own against the underperforming dollar bloc currencies, and the euro. BoE Monetary Policy Committee member Ramsden yesterday managed to keep the idea of going negative with interest rates alive by saying that it will remain in the 'toolkit' should the anticipated economic recovery turn sour. This seemed to have offset the modest upward revision in the final release of the February manufacturing PMI survey out of the UK, and the signal from the UK government, which is preparing its annual budget (to be presented on Wednesday), that the prospect of a strong growth rebound is limiting the need for tax rises. The prevailing lackluster performance of the pound is a correction in an overall upward trend. Sterling still registers the strongest of the main currencies in the year so far, showing an average gain of just over 3% against the dollar, euro, and yen at prevailing levels. The speedy rollout of COVID-19 vaccinations in the UK, alongside the end of what had been long-running Brexit uncertainty, can be attributed to a brightening outlook for the UK economy. As of yesterday, 30.77 per 100 of the population have received at least the first dose of the COVID-19 vaccine. Only Israel and the UAE are ahead globally, while the vaccination count currently stands at about 4 to 5 times more than in most EU nations. The rate of new positive COVID-19 test results in the UK is now less than a 10th of what it was at the peak in early January, while the seven-day moving average of emergency calls with COVID-19-like symptoms is now at the lowest since the pandemic started. Despite this, the UK government is enacting a slow, four-phase reopening process, with the aim of completing the process in mid-June. There remain concerns about new variants of SARS-Cov2, which are more transmissible and more resistant to the existing vaccines, with both the Brazilian and South African variants having been detected on British shores.
The dollar and yen have gained on an apparent haven bid as Asian stock markets turned lower after the head of the China banking regulator warned of bubbles developing in foreign markets and domestic property markets, and signaled that Beijing is looking at measures to manage capital inflows to forestall turbulence in domestic markets. The main Chinese stock indices dropped over 1%, pulling the MSCI Asia-Pacific index lower. S&P 500 futures have fallen by nearly 0.5% after the cash version of the index closed on Wall Street with a 2.4% gain, which was its best day in nearly nine months. Base metals have traded mixed, while oil prices have dropped over 1%. Japanese CAPEX data and Australian building approvals undershoot expectations. The RBA left monetary policy unchanged, as had been widely anticipated, and maintained guidance that the cash rate will not be hiked until employment and inflation targets are met. The Australian dollar lifted modestly in the immediate wake of the RBA's announcement, which elicited selling that pushed the antipodean currency to fell to fresh intraday lows. Against this backdrop, the DXY dollar index printed a near one-month high at 91.32, and EUR-USD a near one-month low at 1.2003. USD-JPY posted a fresh six-month high at 106.93 in what the pair’s fifth up week is now out of the six weeks, despite the Japanese currency posting gains versus other currencies today, rebounding from recent underperformance. Cable pegged a 12-day low at 1.3866. The dollar bloc currencies and other cyclical currencies, such as the South African rand and Mexican peso, also lost ground to the greenback. AUD-USD ebbed under 0.7750 after peaking yesterday at 0.7788. The pair remains well over 2 big figures down on the three-year peak that was seen last Thursday just above 0.8000. Oil correlating currencies, such as the Canadian dollar, came under pressure concomitantly with a near 1.5% drop in oil prices, with crude now amid its biggest correction since last October. USD-CAD posted a high at 1.2699, rebounding from a four-day low at 1.2636. Front-month WTI futures fell to an eight-day low at $59.45, marking a near 7% retreat from last week's 13-month high.
XE Market Analysis Europe – 3rd March 2021
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