The Pound is still trading strong on Thursday after reaching the 1.37 mark against the U.S. Dollar yesterday – a level not seen since seen 2018. Sterling was also able to secure its fourth consecutive session of gains against the Euro, as the Pound capitalized on the market’s upbeat sentiment following interest rate speculation and vaccination hopes.
After briefly touching the 1.37 barrier, GBPUSD opened on Thursday at 1.3679, and was able to sustain itself around that mark for most of the session. The pair did depreciate over the day, closing at 1.3628, but has since improved on that and trades around the 1.3650 mark this morning.
GBPEUR also started Thursday strong, opening at 1.1216. The pair traded in a tight range throughout most of the session and was unable to make any significant moves to the upside. The pair finally ended the day at 1.1209.
EURUSD continued to struggle yesterday, opening at 1.2196 and closing at 1.2158. Rumours from CNN that Joe Biden is looking to announce a $2 trillion COVID-19 stimulus package is helping support the Dollar and suppress the rate. This move from Biden would be Dollar positive, not only because it will be a boost to the US economy, but also because it will push US Treasury yields higher, making the Greenback more attractive.
Later this evening we have Fed Chair Jerome Powell giving a speech. In regard to inflation, The Labour Department revealed that US consumer prices rose solidly last month. Fuelled by a surge in the cost of gasoline; Core Inflation for December came out at 0.4%, following a previous of 0.2% in November. As for the YoY figure – in the 12 months to December, Inflation Rate was 1.4% for December, with a previous of 1.2%. However, underlying inflation remains depressed as the US economy continues to battle with COVID-19.