IFX Market Report: Tuesday 9th March 2021

The U.S. Dollar kept up its impressive run of form as EURUSD reached fresh 2021 lows yesterday, dipping below levels not seen since November 2020. Contributing to the Greenbacks success last week was better than expected Non-Farm Payrolls, coming out at 379K. Then at the weekend the Senate approved a $1.9 trillion COVID-19 relief bill in a 50-49 party line vote. The Democratic-held house aims to pass the stimulus bill today and have it signed by President Joe Biden before the March 14th deadline to renew unemployment aid programs. Lastly (and arguably most importantly), yesterday the 10-year U.S. Treasury yield tested yearly highs as it climbed to 1.6%. Thus, the Dollar was able to maintain its momentum on Monday as it made strong advances against the Pound and Euro.

GBPUSD once again had a tough session to start the week. Cable opened Monday at 1.3811 and closed a slither above that mark at 1.3812 despite coming under heavy selling pressure in the latter half of the day.

GBPEUR on the other hand was able to make subtle gains in yesterday’s session, closing 35 pips above were it opened. The pair started the day at 1.1613 and closed at 1.1648.

Rising U.S. yields lead to a disastrous day for EURUSD. The pair started the week at 1.1892 and closed Monday at 1.1857. The pair remained volatile after the close and sunk as low as 1.1845 (16:42 GMT). With U.S. strength in abundance and the Euro struggling it is likely EURUSD will endure more losses in the coming days.

Europe is the focus of today’s economic calendar, with Eurozone GDP Growth Rate being the highlight. The YoY is expected at -5% with a previous of -4.3%, while the QoQ reading is forecasted at -0.6%, with a previous of 12.4%. Alongside these releases we have Balance of Trade for Germany at 07:00 and Italian Industrial Production at 09:00. Then in the evening Fed member Robert Kaplan will be speaking.

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