Thursday proved to be a rather uneventful day for markets, with rates trading flat for most of the day. The market maintained its ‘risk-on’ tone and the Dollar came under some pressure, allowing EURUSD to make gains before the close. After the London session ended the pair continued to rally, reaching a two-week high of 1.1927.
With this said, the pairs run has been short lived as a multitude of risk factors have present themselves to investors, thus creating a demand for the safe-haven Greenback. The significant rise in COVID-19 cases in Asia is one of the markets largest concerns. Reuters reported that India, South Korea, and Thailand saw a huge spike in cases on Thursday “undermining cautious hopes that Asia might be emerging from the worst of the pandemic as worries about safety threatened to delay vaccination drives”. “India reported a record 126,789 new cases, the third day this week tallies have surged to more than 100,000, catching by surprise authorities who have blamed crowding and a reluctance to wear masks as shops and offices reopen”. The alarming figures have prompted neighbouring countries to take extra precautions – notably New Zealand. Prime Minister Jacinda Arden said “We are temporarily suspending entry into New Zealand” from certain territories due to the rise in COVID-19 cases worldwide.
GBPUSD opened Thursday at 1.3760 but struggled to gain any momentum and closed at 1.3731.
GBPEUR also made moves to the downside – opening at 1.1590 and closing at 1.1539.
EURUSD started the day at 1.1872 but was able to close at 1.1900 and excel beyond that mark as the evening progressed.