IFX Market Report: Friday 5th March 2021

Sterling was able to make modest gains on Thursdays session as the currency maintained momentum following Rishi Sunak’s Budget on Wednesday. The Pound was able to surpass the 1.16 barrier against the Euro and briefly enjoy a spell above 1.40 against the Greenback in the session. The main story of the day however came after the London close, when Fed Chair Jerome Powell’s comments on inflation sent US equities and bonds lower, enabling the Dollar to advance. Powell triggered the sudden sell-off after he vowed to keep monetary policy loose even as the economy improves and inflation rises. Powell stressed that the central bank would remain “patient” in withdrawing support for the recovery, especially since recent labour market data has remained disappointing and far from the Feds target.

GBPUSD was able to claw back some of the recent losses it had made on Thursday. Cable opened at 1.3956 and closed at 1.3990. During the session the pair was able to go beyond the 1.40 mark but met tough resistance and was unable to sustain itself at that level. Following the close Dollar strength caused the pair to depreciate significantly and trade below the 1.3890 mark.

GBPEUR also put in an impressive performance on Thursday. The pair started the day at 1.1579 and was able to close at 1.1620

EURUSD traded mostly flat yesterday opening at 1.2052 and closing at 1.2040. The pair finally saw some price action when Powell started to speak and plummeted to below 1.1980.

On the data front, it’s a busy schedule to finish the week, with U.S. Non-Farm Payrolls taking centre stage. The monthly employment report is forecasted to post a reading of 182K, with a previous of 49K. Alongside this, also released at this time will be the Unemployment Rate for February, set to remain at 6.3%. From the U.S. we also have Average Hourly Earnings MoM, YoY, Average Weekly Hours, Balance of Trade for January, and Participation Rate. Fed member Bostic will also be giving a speech at 20:00 GMT.

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