FX MARKET REPORT 06.01.2021
The USD witnessed some fresh selling during the early European session and pushed the GBP/USD pair to two-day tops, around mid-1.3600s. The pair quickly reversed an intraday dip to sub-1.3600 level and moved into the positive territory for the second consecutive session on Wednesday. The uptick also marks the fifth day of a positive move in the previous six and was exclusively sponsored by the emergence of some fresh selling around the US dollar. Hopes for a strong global economic recovery in 2021 remained supportive of the underlying bullish tone in the financial markets. This, along with speculations that the Fed will keep rates lower for a longer period undermined the safe-haven greenback and further extended some support to the GBP/USD pair. Bulls seemed rather unaffected by concerns about the economic fallout from the imposition of a third nationwide lockdown in the UK, which might have raised prospects for additional policy easing by the Bank of England. Nevertheless, the USD price dynamics remains an exclusive driver of the GBP/USD pair’s intraday positive move. The UK Vaccines Minister Nadhim Zahawi said Wednesday, the vaccine target set by Prime Minister Boris Johnson is very stretching. However, he said that they are confident of reaching the target. EUR/USD is currently trading at 1.2288, having reached a high of 1.2327 early today. That was the highest level since April 2018. The dollar index hit a fresh 2-1/2 year low on Wednesday before firming about 0.1% to 89.575. The benchmark 10-year Treasury yields rose above 1% for the first time since March.