FX MARKET REPORT 21.12.2020

FX MARKET REPORT 21.12.2020

FX MARKET REPORT 21.12.2020

Daily Commentary
FX MARKET REPORT 21.12.2020
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FX MARKET REPORT 21.12.2020

GBP/USD added to its steep intraday decline and plunged to over one-week  lows. New coronavirus strains led to fresh lockdown in the UK and  weighed on the GBP. Weaker risk tone benefitted the safe-haven USD and  contributed to the selling bias. The pair opened with a bearish gap on  the first day of a new trading week in reaction to the imposition of  tighter restrictions in the UK to stem a fast-spreading new coronavirus  strain. This comes on the back of a deadlock in the post-Brexit trade  negotiations and weighed heavily on the British pound. Meanwhile, fresh  coronavirus jitters overshadowed the optimism over a deal on a  long-awaited $900 billion US coronavirus aid package and an emergency  use approval for Moderna’s COVID-19 vaccine. This, in turn, took its  toll on the global risk sentiment and triggered a sharp pullback in the  equity markets. Following a volatile Q1, EUR/USD gained strong upside  traction breaking above the long-term downside trendline from the 2008  high. Essentially, the fact that the euro managed to clear this  important barrier was a strong bullish signal. The 1.45 mark would be an  ambitious target for investors who expect the shared currency to  perform well in the next years, according to economists at Rabobank. The  dollar index corrected after an extended slide on bets that a weak  dollar will favor growth in emerging economies next year. The trigger  for the reversal came from a story arguing that Janet Yellen, who is set  to be the next Treasury Secretary, may return to defending the U.S.’s  traditional policy of a strong dollar, after four years of unvarnished  attempts by the Trump administration to weaken it.

GBP/USD added to its steep intraday decline and plunged to over one-week  lows. New coronavirus strains led to fresh lockdown in the UK and  weighed on the GBP. Weaker risk tone benefitted the safe-haven USD and  contributed to the selling bias. The pair opened with a bearish gap on  the first day of a new…

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