As written about in yesterday’s update, Covid cases have been falling since England abolished all restrictions Monday last week. Yesterday, the UK reported a drop of 38% week-on-week positive test results for the virus, which gave the pound room to move north against most of the major currencies. The GBPEUR exchange rate was the highlight of the day, with prices topping and holding above the 1.17 level.
Against the dollar, the pound made a run above the 1.38 mark again, however there was not enough upside momentum to keep it there. Selling pressure has seen the rate drop this morning, back below that mark. The economic calendar is dollar heavy today, with a flurry of data releasing from UK lunchtime onwards. Durable goods orders and nondefense capital goods orders, excluding aircraft figures, will be the highlight of the day and will be the first releases. Analysts are torn on the direction of the price, with some touting moves towards the 1.39 marker.
The big event of the week still remains to be the Fed meeting tomorrow evening European time. Whilst no shocks are expected to take place, the following press conference will be examined under the microscope for clues on when the Federal Open Market Committee see the economy heading throughout the course of 2021. Previously the Fed has stated interest rates will remain low for a number of years to support the Covid battered economy.
Have a great day.
Jack Nicholls, Relationship Manager.
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