Market Analysis

The euro lost further ground to the pound

FOREX

The euro lost further ground to the pound during early Friday trading, continuing the trend of earlier sessions that has seen the single currency losing more than 1% to sterling since Monday. The relative success of the UK’s vaccine rollout contrasts with the, so far, suboptimal progress of the European program. The slow pace of the vaccine deployment orchestrated by Brussels is triggering fears of a slower than expected economic recovery in the EU, while on the other side of the channel the picture looks rosier, with hopes that Britain may have vaccinated its entire adult population by July. This scenario is, supporting the pound and punishing the euro, especially after the Bank of England indicated yesterday that negative rates won’t be deployed in the short- to medium-term. Meanwhile European economic data, such as German factory orders, point at a double dip recession triggered by the latest wave of lockdowns.

Ricardo Evangelista – Senior Analyst, ActivTrades


GOLD

Gold has rallied slightly in the last few hours but remains under pressure from various factors that have seen the price fall below $1,800. Strength shown in many stock markets in recent days has pushed investors to look for riskier assets, while more positive signals in the US labour market is bringing hope for a quick rebound of economies. With US yields also growing quickly, the dollar has started to recover after months of decline. This rebound in the greenback is a negative element for gold and may make a rebound in price difficult.

Carlo Alberto De Casa – Chief analyst, ActivTrades

Source: ActivTrader

 

 

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