GBP: Brushes off Brexit headlines and focuses on BoE
EUR: Increase in coronavirus numbers add to EUR woes
USD: Unchanged ahead of FOMC
Sterling
GBP declined sharply yesterday morning following news of the EU’s legal challenge on the UK over Northern Ireland. However, this weakness proved to be very short lived as by the afternoon the pound recovered and managed to end the day back up to the previous days highs. Reason for the bounce back? Optimism as we head into the BoE MPC meeting on Thursday as markets shrugged off the dreaded Brexit headline and focused on the economy and any signal from the BoE that they have grown more confident about the UK economy.
This morning we have seen the pound carve out a new year high versus the euro.
Euro
The EUR continued to lose ground over the course of the day. Concerns over Covid-19 starting to spread in Germany and Italy introducing new restrictions is no doubt having a negative tone on the euro.
In focus this morning, is eurozone inflation at 10am.
US dollar
The dollar was relatively unchanged yesterday heading into the FOMC meeting this evening. Focus will be on whether the Fed will step in to cap recent rises in long-term rate, or perhaps hint at tapering policy measures earlier than expected.
Data yesterday showed that retail sales in the US for February fell by 3.5%, however this isn’t being deemed as too negative at the moment with another round of stimulus cheques hitting bank accounts soon and markets expecting a surge in spending and shopping in March and April.
Market rates
Today’s interbank rates at 09:20 against sterling. Movement vs yesterday.
| Euro | €1.167 ↑ |
| US dollar | $1.389 ↑ |
| Australian dollar | $1.798 ↑ |
| South African rand | R20.731 ↑ |
| Japanese yen | ¥151.66 ↑ |
Have a great day everyone.
