GBP/USD crawls back above 1.3600 as US dollar demand fades


  • GBP/USD has crawled above the 1.3600 level in recent trade and currently trades close to highs of the day in the 13620s.
  • The main event of the day has been Yellen’s testimony to Congress, which did not deliver fireworks.
  • The latest daily UK Covid-19 statistics were mixed.

GBP/USD has crawled above the 1.3600 level in recent trade and currently trades close to highs of the day in the 13620s, up about 0.3% or 40 pips on the day. The move has primarily been driven by USD weakness; the Dollar Index has dropped back below the 90.50 mark from earlier weekly highs close to 91.00. As US flow returned after MLK day on Monday, markets have adopted a more upbeat mode (US stocks, crude oil and industrial metals all up).

The main event of the day has been US Treasury Secretary nominee Janet Yellen’s confirmation testimony to Congress; as expected, she called for “big” spending (in line with incoming US President Joe Biden’s stimulus plans) to take advantage of the low rate environment and indicated a hands-off approach to USD exchange rates. Given that most of her testimony was leaked over the weekend, the market reaction to her remarks has been muted. FX market attention now turns to Biden’s inauguration on Wednesday for more on the incoming administration's plans for the US economic recovery.

UK News

The latest daily UK Covid-19 statistics were mixed; on the one hand, cases rose 33,355, another decline and down from over 70K additional cases a little over a week ago. The rapid drop in the infection rate shows that the latest lockdown is working, or at the very least that after meeting with family and friends over Christmas (contributing to the spike to more than 70K cases per day), the nation has drastically reduced its number of social contacts. However, 1,610 were reported to have died after testing positive with Covid-19 in the last 28 days, a new record number daily number that suggests, as far as the hospitals are concerned, the worst is far from yet over.

Meanwhile, according to government sources, top officials are realising that tough restrictions are likely to remain in place in large UK cities perhaps even as late as May given the high level of infections. Much depends on what happens with the death rate over the coming weeks as more and more of the most vulnerable in the UK are vaccinated; most analysts assume there will be a fast drop off in the death rate as those most likely to die acquire immunity. As the death rate drops, policymakers are likely to have a more difficult time in justifying why strict lockdowns should remain in place. Given its vaccination lead, the UK is still likely to be able to fully open up ahead of its developed market peers.

Driving the week for sterling

Next up, Bank of England Chief Economist Andy Haldane will be speaking. On Wednesday, focus will then turn to the release of December Consumer and Producer Price Inflation numbers and then on Friday to December Retail Sales and January flash PMIs.

GBP/USD

Overview
Today last price 1.3627
Today Daily Change 0.0041
Today Daily Change % 0.30
Today daily open 1.3586
 
Trends
Daily SMA20 1.3574
Daily SMA50 1.3434
Daily SMA100 1.3206
Daily SMA200 1.2919
 
Levels
Previous Daily High 1.3606
Previous Daily Low 1.352
Previous Weekly High 1.371
Previous Weekly Low 1.3451
Previous Monthly High 1.3686
Previous Monthly Low 1.3134
Daily Fibonacci 38.2% 1.3573
Daily Fibonacci 61.8% 1.3553
Daily Pivot Point S1 1.3535
Daily Pivot Point S2 1.3485
Daily Pivot Point S3 1.3449
Daily Pivot Point R1 1.3622
Daily Pivot Point R2 1.3657
Daily Pivot Point R3 1.3708

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD falls toward 1.19 after robust US Nonfarm Payrolls data

EUR/USD is trading above 1.19 after dipping below that number in response to the US Nonfarm Payrolls, which showed an increase of 379K jobs in February. Higher yields in response to Powell are keeping the dollar bid.

EUR/USD News

GBP/USD recovers after post-NFP dip below 1.38

GBP/USD is trading above 1.38 bus till down the day. The US gained 379.000 jobs, roughly double than expected and supporting the dollar. The Senate's stimulus debate is eyed.

GBP/USD News

XAU/USD battles 1700 level

Gold is staging a rebound toward $1,700 amid proift-taking ahead of the weekend but remains on track to close the third straight week in the negative territory.

Gold News

Ethereum price primed for a swift recovery as the network prepares for a major update in July

Ethereum price aims for a significant recovery towards $2,000. A major upgrade scheduled for July intends to fix the problem with gas fees on Ethereum. ETH miners are not happy with the decision.

Read more

US Dollar Index pushes higher to 92.20 on stellar Payrolls

The march north in the greenback remains unabated and trade in fresh 2021 highs beyond the 92.00 hurdle when tracked by the US Dollar Index (DXY).

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures