Daily Currency Update

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Pound remains range bound

GBP - British Pound

Joe Biden on Wednesday outlined a broad plan to re-make America with spending of $2.3t on roads, railways, broadband, clean energy and semiconductor manufacture. The infrastructure package, which has yet to be passed in congress, follows the recent $1.9t pandemic relief package and is proposed to be paid for by raising the corporate tax rate from 21% to 28%. If approved, the spending will be spread over 8 years and the cost will be offset over 15 years. The news has done little to change the recent range between GBPUSD as movement remains within the 1.3700 to 1.3800 handle. Markets are still digesting the news however, but sentiment leans towards the package being too small to “build back better”.

Data around the headline news showed private sector employment in the US increased by 517,000 jobs from February to March. This is a significant improvement from the previous 176k, but fell just under the forecast 552k. Today and tomorrow, data updates will continue to come from the US who don’t see non-working days over Easter. The bigger of the releases comes tomorrow in the form of employment data.

Key Movers

There are growing concerns in Europe after hiccups with the vaccine rollout and a fresh wave of coronavirus infections, which has seen France order a third national lockdown yesterday. President Emmanuel Macron made the announcement as new infection numbers hit their highest since November this week and those in intensive care is now approaching the peak of the first wave. In the southern states of Germany, two premiers have urged the rest of the country to reintroduce tougher lockdown measures and Sweden have postponed the easing of some restrictions until the start of May.

The euro has been punished as the pandemic turns resurgent on the continent. GBPEUR, although it remains range bound, opens this morning at the top end of that range (1.1750) and EURUSD has twice tried to fall below 1.1700 in the past 24 hours.

Expected Ranges

GBP/USD: 1.3720 - 1.3840 ▲

GBP/EUR: 1.1710 - 1.1770 ▲

EUR/USD: 1.1705 - 1.1780 ▲

GBP/AUD: 1.8140 - 1.8280 ▲