GBP outperforms as Covid cases start to fall
A decline in UK Covid cases has helped improve sentiment for UK stocks. Meanwhile, the push to impeach Trump continues, yet runs the risk of stoking further discontent.

  • Dollar on the rise, but would a Trump impeachment help or hinder sentiment?

  • High street names tick higher as Covid cases turn lower.

  • GBP outperforms with Brexit and Covid fears easing somewhat.

European markets have enjoyed a tentative foray into positive territory in early trade today, with traders continuing to weigh up a myriad of positive and negative drivers. The US dollar is back on the front-foot once again this morning following sharp declines yesterday, with traders keeping a close eye on events in Washington. A lot changes in a week, and that timeframe has taken Donald Trump from hoping to overturn his election loss to merely hoping he can remain in the White House for another week. Pressure on Pence to enact the 25th Amendment seem unlikely to succeed, yet there is a strong chance of impeachment in Trumps final days which would dent his hopes of running again in 2024. Nevertheless, impeachment alone would not prohibit the President from running once more, with another additional vote on the matter required to ensure he cannot run again. Nevertheless, while many Republicans will hope that impeachment and the recent tech lockdown will end his movement, the plans for armed protests throughout the country highlight the problems that come when a person with 70 million supporters is forcibly shut down. 

A number of high street stocks are seeing tentative gains this morning, with the UK seemingly turning a corner on the first against this latest Coronavirus wave. With new cases finally starting to decline, there is a feeling that the Christmas surge is behind us. The UK vaccination push has already been impressive, and there is room for further optimism given the AstraZeneca rollout. As we approach the two-week mark into Brexit, fears of a complete collapse at the border have instead turned into stories of Lorry drivers losing their Ham sandwich. Thus with vaccinations ramping up, Covid-cases turning lower, and Brexit fears subsiding, it comes as no surprise to see the pound outperform of late. 

Ahead of the open we expect the Dow Jones to open 35 points higher, at 31,104. 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 

EUR/USD News

GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 

GBP/USD News

Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex Majors

Cryptocurrencies

Signatures