Sterling continues its gains against the USD
Wednesday 10 February, 2021
Daily Currency UpdateGBP - British PoundSterling looks set to continue its gains for a fourth day against the USD as markets remain upbeat regarding the global economic recovery from the coronavirus pandemic induced downturn. Markets remain buoyed on the news that last Friday, the US senate endorsed President Biden’s $1.9trillon stimulus package, clearing a path for the package to be approved and signed by March 15th. This combined with continuing drops in new coronavirus cases worldwide will likely encourage further gains for GBP/USDSaying that we may see some volatility in the currency pair when US consumer price index reports are release later today, along with speeches from Bank of England Governor Andrew Bailey and US Federal Reserve bank Chief Jerome Powell. Considering that most central bankers are optimistic about the recovery and worried about inflation, most of their comments are unlikely to pose a threat to current rallies.
Key Moversorts Mario Draghi is on the precipice of forming a collation government and becoming the new Italian Premier helped EUR/USD drive above the 1.21 level. While EUR/USD did peak higher back in December, the pair has not held current levels since March 2018. Draghi is tipped to be the saviour of the Italian economy and expected to save the country from economic ruin. He has already signalled the need to prioritise a common EU budget, direct Italy’s share of the EU recovery fund and increase focus on fiscal reform. Having pushed through 1.21 overnight the euro has well and truly bounced off last week's dip below 1.20. That being said most analysts still predict the single currency softening through the back half of the year as the Eurozone recovery lags that of major counterparts. With little of note in terms of today’s data releases, apart from US CPI numbers, our attentions turn to commentary from Fed-chair Jerome Powell. With the Fed President expected to offer little beyond the current narrative price action across currency markets will likely remain muted.
- GBP/USD: 1.3785 - 1.3885 ▲
- GBP/EUR: 1.1385 - 1.1465 ▲
- GBP/AUD: 1.7850 - 1.80 ▲
- GBP/NZD: 1.9135 - 1.9250 ▲
- GBP/CAD: 1.7525 - 1.7650 ▲