The Greenback kept up its impressive surge in the Friday session, notching gains against both Euro and Sterling as U.S. Treasury yields maintained their recent highs. EURUSD came under significant pressure and dropped as low as 1.1874 on the day. The outlook is especially bearish for the Euro at present, with rising fears of further European lockdowns due to the struggling vaccination effort and a rise of infections.
At the weekend twenty EU countries reported an “exponential growth” in the rate of positive tests and 15 have said hospital or intensive care admissions have increased. Despite Angela Merkle saying to the German press recently, “the motto is ‘vaccinate, vaccinate, vaccinate’”, just 8.5% of Germany’s population have receive their first dose. Compared to the UK, where over half of the adult population have had their first jab, these figures are poor. Paris and 15 other French regions also went back into lockdown at the weekend as Prime Minister Jean Castex said the country is facing a “third wave”. In Poland also, most business and public venues have been closed for a minimum of three weeks.
GBPUSD started Friday above the 1.39 handle at 1.3922 but quickly lost ground. Cable finally closed the week at 1.3871.
GBPEUR traded rather flat over the session with little happening in the markets to give the pair direction. The pair opened at 1.1673 and closed at 1.1647.
EURUSD opened at 1.1924 on Friday and depreciated rapidly into the 1.18’s. The pair was able to climb back up to 1.19 and closed the week at 1.1908.
On the data front, being released from the U.S. at 12:30 is the Chicago Fed National Activity Index, followed by Existing Home Sales. At 13:00 Fed Chair Jerome Powell will be speaking.