IFX Market Report: Wednesday 30th December 2020

After a disappointing day of trading yesterday, GBPUSD has risen sharply this morning as the market continues to aggressively sell off the U.S. Dollar. Despite a delay in the Senate holding up stimulus checks, investors remain optimistic about the likelihood of additional financial aid to the American people. This, coupled with increasing bets for a strong global economic recovery in 2021, supports the current risk-on market mood and continues to hinder the greenbacks performance. As a result of the weakening Dollar, GBPUSD is up 0.8% from where it opened this morning, and EURUSD was able to reach fresh 32-month highs early this morning.

As the COVID-19 situation grows increasingly worse here in England, fears of what the virus has done and will continue to do to the UK economy weighs heavy on the Pound. GBPUSD opened Tuesday at 1.3514 and closed just below that mark at 1.3509.

GBPEUR did not see much price action yesterday. Trading in a tight 50 pip range throughout the course of the day, the pair opened and closed at 1.1026

After spending some time trying to break past the 1.2210 mark, EURUSD nearly reached the 1.23 handle this morning, trading as high as 1.2294. The cause for this move was mainly due to USD weakness – and with the market’s tone become ever more risk on, there is possibility for even more upside. Before this mornings spike, the pair had a relatively calm session yesterday – opening at 1.2257 and closing at 1.2251.

As Britain is forced to implement further COVID-19 restrictions, the Oxford-AstraZeneca vaccine has been approved for use in the UK and the first doses are due to be given out on Monday. PM Johnson has described the breakthrough as “a triumph” adding that he “will now move to vaccinate as many people as quickly as possible”. The UK has ordered 100M doses, which is enough to vaccinate 50M people. Health Secretary Matt Hancock said that this is enough to cover the whole population when combined with the full order of the Pfizer-BioNTech vaccine. On Tuesday, the UK recorded its highest amount of single day cases since mass testing began – 53,135 – as well as 414 more death with 28 days of a positive test.

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