After reaching a fresh 34-month high on Tuesday, economists are predicting GBPUSD could surpass the 1.40 handle in the coming days. Many strategists have claimed that technical momentum remains solid and there are no reasons why this surge cannot continue. Having started 2021 at 1.3674, by reaching the 1.3930 level Sterling has proved itself to be the best performing G10 currency of the year so far. Helping cable reach impressive heights has been a weaker U.S. Dollar, which has been struggling due to the rising value of global stocks. Because of its ‘safe haven’ status, while market sentiment is ‘upbeat’ convention dictates investors will short the greenback.
Despite putting on an impressive performance yesterday, cable in fact closed lower than were it opened. The pair started the day at 1.3926 and closed just above the 1.39 mark at 1.3909.
GBPEUR in contrast was able to gain some traction towards the end of Tuesday’s session. The pair opened at 1.1468 and closed 20 bps above at 1.1488.
EURUSD once again had a disappointing session, finishing close to the 1.21 handle. The pair opened at 1.2142 but was unable to gain any momentum in the session and closed at 1.2107.
On the data front, we have a packed calendar of economic releases and events. Kicking off the day from the UK we have Inflation data this morning in the form of Core Inflation YoY, Inflation YoY & MoM. Then at 08:00 we have the ECB Non-Monetary Policy meeting, followed by a plethora of releases from the US. Starting at 12:00 we have MBA Mortgage Applications, then Retail Sales, Industrial Production YoY, Business Inventories for December; and finally, the FMOC Minutes.