The pound continues to be front and center
Wednesday 24 February, 2021
Daily Currency UpdateUSD - United States DollarGBPUSD stopped just short of 1.42 yesterday, peaking at 1.4194 and hitting its highest exchange rate since 2018. The pound has been on a tear since its divorce from the European Union. And like an ignored ex, it has gotten carried away. The government’s vaccination program and the population’s flexibility during lockdown have increased demand for the pound.Demand for the US dollar has been soft. Commodities, and the countries that export them, have been in demand as economic recovery peaks around the corner. USDCAD has fallen to 1.255, its lowest value since 2018.
Key MoversThe pound has managed to shrug off concerns around the labor market yesterday and continue to eke out gains against both the USD and EUR. Indeed, at one point overnight, when liquidity was thinner, GBPUSD managed to surge 100 points due to several options being triggered before retracing back down to the mid-1.41s. Despite this though it is remarkable how easily the pound has moved through GBPUSD 1.39 up to 1.41+ and GBPEUR 1.14 to 1.16+. Regarding the labor market it was mixed news yesterday for the UK. While unemployment hit the highest level in 5 years there are signs that more and more people are being added back to the payroll an indication that the labor market is stabilizing.The Australian dollar held onto gains above 0.79 US cents through trade on Tuesday, in what was otherwise a largely lackluster session. Having touched highs at 0.7929, the AUD tracked sideways through much of the day and struggled to extend beyond resistance at 0.7930 while maintaining an equally narrow band against key crosses. Investors looked to capitalize on Monday’s advance, squaring positions as risk flows faltered and equities fell.
- EUR/USD: 1.211 - 1.217 ▲
- GBP/USD: 1.409 - 1.419 ▼
- AUD/USD: 0.790 - 0.794 ▼
- USD/CAD: 1.255 - 1.261 ▼