In contrast to last week, the data calendar is looking busier which may aid the pound in the recovery after the recent fall off. It has been a quiet session throughout the Asian trading hours, with most major GBP pairs remaining flat across the board and holding above both the 1.34 level and the 1.17 mark against the dollar and euro respectively. Despite touching a yearly low against the dollar on Friday at 1.3353, the pair has recovered nearly half a percent through the final stages of last week and into this morning.
Pound traders will be keeping an eye on the 2PM GMT meeting in Parliament, where Bank of England Governor and members of the Monetary Policy Committee are to speak through recent decision making for the recent verdict to not raise interest rates in the UK. Traders will also use this as an opportunity to find clues as to what the December 16th MPC meeting will hold.
Both the pound and dollar benefited after the Netherlands entered into a lockdown due to surging Covid cases across the country. Announced on Friday by caretaker Prime Minister, Mark Rutte, the plans have been put in place for 3 weeks with bars and restaurants closing and a limit to gatherings at residences. This has put EUR-USD to a 16 month low – previously you would have to go back to July 2020 to see a similar exchange rate.
Tomorrow will see the release of GDP data for the Eurozone for Q3 of 2021, which could see yet further pressure compounded onto the single currency, should the result come in less that the 2.2% growth expected. Later in the day we also see retail sales published from the US for October, which could push both the euro and pound lower against the Greenback.
Have a great day.
Author: Jack Nicholls, Senior Relationship Manager.
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