While FX markets traded relative flat across the board, a strong US Dollar helped cap any losses against the Pound or Euro. Despite a disappointing US ISM Manufacturing PMI figure on Monday, the Greenback was able to regain positive traction on the Tuesday session, helping keep downward pressure on Cable. The Dollar’s surge is mainly due to investors becoming increasingly hopeful of a faster-than-expected economic recovery from the COVID-19 pandemic. Speaking yesterday, Fed Chair Jerome Powell sparked further optimism as he claimed that the “economy is… making real progress”. He added that as the economy is “reopening”, it is bringing with it much “stronger economic activity” and more sustainable “job creation”.
Various British tabloids reported yesterday that the UK’s COVID-19 vaccine roll out will be fast-tracked in May as the government focuses on “getting second doses to the most vulnerable groups” and “the pace of the rollout” accelerated. The Pound was able to become the strongest G10 currency in Q1 due to the speed and efficiency of the UK’s vaccine rollout, if the government can indeed accelerate its vaccination effort further, we could see Sterling reclaim its former might.
GBPUSD traded in a tight range on Tuesday, staying in the 1.38 range. Cable opened at 1.3880 and closed at 1.3882.
GBPEUR also had an uneventful session – starting Tuesday at 1.1533 and closing at 1.1537.
EURUSD remained rangebound on Tuesday too. The pair opened at 1.2053 and finished the day at 1.2033.
On the data front, Eurozone Markit Composite PMI came out better than forecasted this morning, coming in at 53.8. In the afternoon from the US, April’s ADP Employment Change figure is forecasted to come in at 810K, with a previous of 517K. Following that at 15:00, the latest US ISM Non-Manufacturing will be released, forecasted at 64.3.