The following week is set to be an exciting and busy one coming after last Friday’s solid US jobs report and the weekend Senate approval of the Biden administration’s $1.9 trillion stimulus package. The focus will remain on the greenback after its impressive start to March where it’s already racked up decent gains against both the pound and euro.
The highlight this week comes from Europe in the form of the European Central Bank announcement on Thursday. The central bank is not expected to amend policy but their commentary on the recent rise in bond yields will be of utmost importance. After tapping $1.2350 at the end of last year, EURUSD finds itself trading in the $1.19 handle as the fresh week commences. A dovish ECB announcement could condemn the world’s most traded currency pair to further losses.
Also featuring this week will be US inflation numbers set for release on Wednesday. The surge in bond yields and inflation expectations will ensure this data point is closely monitored. Domestically, January GDP data will be released on Friday morning. With the UK in full lockdown throughout this month is very likely this reading is very soft, this will largely already be priced into sterling.
Have a good week.
8:24am, March 8th 2021
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