IFX Market Report: Tuesday 9th February 2021

Sterling has made an impressive start to Tuesday’s session after a strong finish on Monday. Surpassing the 1.3750 mark overnight, GBPUSD is doing well to trade above 1.3775 at present. With Brexit now finally put to bed, rising stock markets and the success of the UK Government’s vaccination programme are the two main factors supporting the Pound at this moment in time. With the UK on track to make a substantial recovery due to its vaccine efforts, the odds of the Bank of England cutting interest rates again decrease significantly, which is also Sterling positive.

After opening the week at 1.3713 cable showed resilience to climb even higher in the session. While the Dollar showed some strength on the day, GBPUSD was able to close above where it started, at 1.3739.

After reaching fresh 8-month highs last week, GBPEUR was able to continue its impressive form and close above 1.14 on Monday. The pair started the day 1.1399 and quickly advanced into the 1.14 range, closing finally at 1.1406.

The Euro has shown some strength in recent days against the U.S. Dollar off the back of growing hopes that a fiscal stimulus package will be delivered by lawmakers in the US in coming weeks. EURUSD started Monday at 1.2030 and closed the session at 1.2044.

Across the pound, both House and Senate Democrats have filed a joint budget resolutions that will allow Joe Biden to pass his proposed $1.9 trillion package with a simple majority. Recent data releases indicate that the recovery in the US is slowing dramatically, and it appears clear more support is needed in the local economies. Last week’s non-farm payroll report showed that the local economy added an uninspiring 49,000 jobs while unemployment fell from 6.7% to 6.3%, which was largely due to fewer people actively searching for employment.

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