The US dollar saw strong demand across Tuesday’s session as bond yields rose and stock markets sold off. The pound fell back through the $1.38 figure and closed the day around the $1.3780 level. EURUSD fell too but not to as greater extent as sterling. This pushed the GBPEUR cross pair back down to the low €1.16s. If Wednesday’s session continues with a risk-off tone then the greenback may see continued demand, potentially seeing GBPUSD test the $1.37 level.
Today’s session sees a monetary policy decision from the Bank of Canada. Whilst this takes place, traders and dealers will also be preparing for tomorrow’s European Central Bank announcement. It’s expected that Madame Lagarde will not change policy and will steer the same course. The ECB is much further behind the Fed and Bank of England in respect to tightening monetary policy so no new insight is expected.
Written by Viv Savani. 7:28am, September 8th 2021
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