Welcome to Orbis Exchange Group’s market update.
Where you will be able to keep up to date with all the latest changes in the currency market.
Great British Pound
The British pound has come under sustained selling pressure ahead of the weekend. We have seen a decline of 0.80% against the Dollar and a third of a percent against the EUR.
Surprise to many
This decline came to a surprise to many and there wasn’t any clear data or news to suggest why this was the case. However the profit taking by traders who have seen strong gains from betting on GBP in 2021 was suspected by some analysts as driving the move lower.
The main talking point of this coming week is the Bank of England’s March policy meeting, the bank is tipped to send out a strong message which is tipped to support the pound.
BOE will keep a positive outlook
Analysts predict that BOE will keep a positive outlook with the increasing pace in vaccinations which is expected to double over the next coming weeks, this is likely to leave a possible outlook for the economic recovery.
As well as this British schools went back this week with the country looking forward to a further easing of lockdown restrictions in the coming weeks.
The EUR has failed to see any real move despite the latest interest rate announcement from the European central bank last week.
Traders were expecting the bank to hold steady on rates and this turned out to be the case. A Reason for the EUR failing to see any major gains against other currencies could be the fact that the UK are much further ahead in the speed of vaccinations.
As well as this, German inflation figures came in as expected last week at 1.3%. This has led to any major lack of movement due to no real news or data shocking the market.
Analysts are predicting for the EUR/USD to fall to as low as 1.17 in the coming weeks.
This Is due to the continents economic underperformance as well as U.S growth expectations rising.
The Dollar was initially pushed lower by last week’s inflation report and a decline in Treasury yields. Leading some investors to reduce bets on a rapid acceleration in inflation.
Dollar is tipped to see some support
The Dollar is tipped to see some support as the Department of Labor revealed that unemployment claims are falling at a steady pace as well as US applications for jobless benefits falling more than forecasted.
We have also seen Joe Biden signing his $1.9 trillion stimulus package into law. This is likely to signal the start of Biden’s attempts to accelerate the nation’s economy recovery without triggering a jump in inflation.
This week’s US economic schedule is rounded off by the latest Michigan consumer Sentiment Index and Producer price index.
Analysts are predicting for both these forecasts to rise which could lend the Dollar some support.