IFX Market Report: Monday 10th May 2021

A weaker Dollar on Friday and over the weekend has led to the Greenback making substantial losses against the Euro and Sterling. This morning, Cable trades above the 1.40 mark and EURUSD is comfortably above the 1.21 handle. After a weaker than expected April Non-Farm Payroll print on Friday, the US Dollar Index (DXY) sank more than 1% last week, assisting the Dollars decline. One economist claims that “the US Dollar has broken to multi-month lows with the index threatening a break of yearly slope support. From at trading standpoint, look to reduce short-exposure / lower protective stops on a test of the yearly open – rallies should be capped by this week’s high IF price is indeed heading lower”. Naturally, once we gain further clarity on the near-term technical DXY trading levels, it will give us indicators as to what the Greenback will do next.

GBPUSD opened on Friday at 1.3906 and was able to maintain its moves to the upside, finishing the week at 1.3978

GBPEUR in contrast made a loss on Friday. The pair started the day at 1.1530 and closed at 1.1512.

EURUSD was also able to make gains at the Dollar’s expense. The pair opened the session at 1.2060 and closed the week at 1.2142.

As for last week’s UK elections, Nicola Sturgeon’s SNP claimed their fourth consecutive victory in the Scottish Parliament, finishing with 64 seats. After the win Ms Sturgeon pledged that is she focused on “the task of building a better Scotland for everyone who lives here”. The SNP leader went on to say the party’s first task is to lead the country through the pandemic whilst keeping people safe from COVID-19. Ms Sturgeon said once the worst of the pandemic is over, it will then be time “to kick start and drive our recovery with an ambitious and transformative programme for government”. On independence Sturgeon said, “when the crisis has passed” it is time “to give people in Scotland the right to choose their future”. With such a strong majority Sturgeon added that there is “no democratic justification whatsoever for Boris Johnson or anyone else seeking to block the right of the Scottish people to choose our future”. Given the results, the SNP may be right in their claim that a second independence referendum is now “the will of the country”.

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