Strength in both the Pound (GBP) and US Dollar (USD) has been mixed, and the Pound US Dollar (GBP/USD) exchange rate has seen volatility as a result. With key UK growth data due on Wednesday, the Pound could see further gains this week.
Last week was a particularly mixed week for GBP/USD. After opening the week at the level of 1.3868, GBP/USD plummeted and touched on a monthly low of 1.3675, before rebounding towards the end of the week.
GBP/USD closed last week at the level of 1.3788, recovering around half of the week’s losses. This morning, GBP/USD is continuing to attempt a recovery and is trending in the region of 1.3836.
While Sterling investors await UK growth data, US Dollar investors are awaiting key US Non-Farm Payroll data at the end of the week.
The Pound has seen weeks of strong performance. Speculation that Britain will be one of the first major economies to recover from the coronavirus pandemic continues to support the British currency.
This week, England’s gradual economic reopening continues. Groups are now allowed to meet outside.
According to Yohay Elam, Analyst at FXStreet, reopening continuing without interruption so far continues to support the Pound
Like the Pound, the US Dollar has been broadly appealing in recent weeks. Over the past week or so especially, a fresh rise in coronavirus ‘third wave’ fears and strong US data have made the US Dollar highly appealing as a safe haven currency.
US bond yields have been rising as well. This is making markets more confident that US inflation will rise as well, which is leaving the US Dollar with even stronger demand.
US inflation and economic expectations continue to rise, even after the Federal Reserve maintained a fairly dovish tone in its most recent policy decisions and comments.
Written by FTG, Author from Investing
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