The Greenback trades strong on Monday as the US Dollar Index (DXY) makes solid gains to edge closer to 93.00. Similarly, as with Sterling in recent weeks, the US Dollar is holding firm because recent events suggest the US could make a strong economic recovery from the COVID-19 pandemic. Economists note that “inflows to the dollar remain well underpinned” due to the “expected outperformance of the US economy vs. its G10 peers, at least in the first half of the year. This view is reinforced by the solid pace of the vaccine campaign in the US and extra fiscal spending, as per the recently approved new stimulus package worth $1.9 trillion”.
GBPUSD opened Friday at 1.3755 and was able to improve on that position by the close, finishing a tough week at 1.3792. With the US having stepped up their vaccination programme and the UK now fearing issues with supply, the tables appeared to have turned in recent weeks for Cable. Any boost or decline to these efforts on either side will almost certainly have an impact on the pair.
GBPEUR was also able to make subtle gains on Friday despite the Euro heading for its biggest monthly drop since mid-2019. The pair opened the session at 1.1674 and closed at 1.1691. As Europe’s COVID-19 vaccination programme falters and infections continue to rise, the Euro’s outlook remains bleak.
EURUSD did little to impress on Friday with limited movement in the session. The pair opened at 1.1782 and closed the week at 1.1796.
On the data front, it is a quiet start to the week, with only Fed member Waller’s speech the only event of significance.