The Pound has reached 34-month highs against the Dollar as a crippling Greenback struggles after a disappointing US Jobs report. According to the US Department of Labour 861,000 Americans signed up for jobless claims in the week to 13 February, which is a week-on-week increase of 16,000 jobless claims. Some believe the claims could be in part related to the temporary closure of car factories last week due to a global semiconductor chip shortage, but the bigger picture to appreciate here is that COVID-19 is destroying the US labour market. While around 12.3M of the 22.2M jobs lost during the pandemic have been recovered, The Congressional Budget Office has alarmingly estimated employment in the US will not return to its pre-pandemic level until at least 2024.
GBPUSD enjoyed a steady incline in Thursday’s session. Opening at 1.3890 cable was able to quickly move into the 1.39 range and advance further. The pair finally closed at 1.3955 but this morning has gone on to surpass the all-important 1.40 handle.
GBPEUR also gained upside in yesterday’s session. The pair opened at 1.1521 and closed at 1.1555. Since the start of the year the Pound has gained just over 2.2% against the common-currency and this trend could continue if external pressures remain. The lacklustre European vaccine rollout has been a heavy burden on the Euro; coupled with the impressive UK vaccine programme and the increasing likelihood of no negative interest rates, some believe GBPEUR could go as high as 1.20 by the end of Q1.
EURUSD had another rather slow session yesterday. A weak Euro and a struggling Dollar induced little price action. Opening at 1.2055, the pair went on to close Thursday at 1.2077.