Sterling Maintains Gains
GBP experienced a very quiet day, although it managed to hold onto gains made Monday. Investors seem to be ignoring the higher daily Covid cases in the UK and with a lack of economic data out this week Sterling is benefitting from Dollar and Euro weakness. Sterling could have further gains in store, with Key data/events happening in the EU and US this week.
EUR extended its gains vs USD, mostly due to Dollar weakness than Euro strength. The market is still waiting for the latest ECB Policy Meeting minutes to see whether there are any fresh clues over when stimulus may be reduced and interest rates finally begin to increase.
USD suffered as the FDA’s approval of the Pfizer vaccine increased optimism that more employees will return to their workplace, leading to a rally in equities (and sell-off in USD). Investors remain cautious ahead of a big end to the week with Powell speaking Friday. Any hint of an end to tapering and we could see a lively end to the trading week – especially when considering we are also approaching the month-end unwinding of positions.
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