The US Dollar was able to set a 16-month high against the Euro on Monday after Federal Reserve Chair Jerome Powell was nominated for a second four-year term by President Joe Biden. The POTUS said the Fed have been able to make “remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again”. Biden added that this “success is a testament to the economic agenda I've pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr Brainard to help steer us through the worst downturn in modern American history and put us on the path to recovery”. The Dollar Index rose 0.27% yesterday to 96.29, the highest the index has been since July last year.
EURUSD started the week at 1.1266 and closed at 1.1261.
Sterling was able to hold its own against the Dollar on Monday as Cable made subtle losses. GBPUSD opened the week at 1.3423 and closed not far off at 1.3412.
GBPEUR also traded in a tight range on Monday. The pair opened at 1.1914 and closed at 1.1909. While price-action was limited yesterday, it should be noted that GBPEUR is still trading considerably high.
The Euro struggled on Monday as cases of COVID-19 rose dramatically in mainland Europe and more lockdowns are imposed. The Netherlands became the first country in Western Europe to impose a form of lockdown and Austria yesterday entered its 4th national lockdown as the government plans to roll out mandatory vaccines from February due to “its existing low uptake”. Germany is also seeing a rise in cases and is warning its citizens to get fully vaccinated as soon as possible. Germany’s Health minister went as far to say yesterday that every German “will either be vaccinated, recovered or dead” by the end of this winter. Germany has 68% of its population fully vaccinated, one of the lowest vaccination rates in Western Europe.