Daily Currency Update

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Investors steer clear of USD

USD - United States Dollar

The US dollar lost momentum last week and it doesn’t seem to have gained its footing today. The US Dollar Index, which measures the value of the dollar against a basket of currencies, peaked at 91.05 on Friday morning. It has been downhill ever since and this morning two-thirds of a percent to 91.16.

Notably, GBPUSD easily climbed over 1.40 and USDCAD fell below 1.26. Why you ask?

The Biden administration began pushing the $1.9 trillion fiscal stimulus package, which includes a $15 federal minimum wage and a $1400 check to households. Investors in equity markets are salivating at the assistance for the US economy.

Key Movers

As the pound finds itself in the position of the market's best performing currency year-to-date, attention will well and truly shift to Prime Minister Boris Johnson's announcement this evening regarding the next steps in the UK lockdown. The success and speed of the UK vaccine rollout and lowering 'R' rate has seen market participants lap up GBP since the start of the yea. It isn't just against the USD that the GBP is surging against. Several key levels against the euro have also been chalked off and EURGBP sits at 0.86.

The Australian dollar stormed through 0.78 resistance levels with little effort on Friday evening, rising 1.3% on the day and ignoring a slump in equity prices. Opening at 0.7780 there was an initial movement lower to intraday lows of 0.7750 as an interim release of retail sales to cover the impact of COVID-19 were disappointing. The seasonally adjusted figure of 0.6% was well short of the 2.1% expected during the month of January. All the action happened for the Australian dollar in offshore trading as risk appetite continues to be positive due to a boom in commodity prices. Base metals such as copper reached $10,000 a ton while Nickel (Australia expects approximately 25% of the global output by 2030) saw its highest price since 2014. The march towards 80 US cents gathered momentum as AUD/USD closed at 0.7866.

Expected Ranges

EUR/USD: 1.209 - 1.215 ▼

GBP/USD: 1.398 - 1.405 ▼

AUD/USD: 0.785 - 0.791 ▼

USD/CAD: 1.258 - 1.265 ▼