Daily Market Update 06/01/2021

 Markets

GBP

GBP/USD remains pressured towards 1.3500 amid a downbeat mood. EU takes multiple Brexit-linked sites offline, UK-France jostle over immigration. UK PM Johnson hints at easing travel restrictions. US dollar capitalizes on hawkish Fed minutes ahead of ISM Services.

EUR

EUR/USD stays on the back foot in the early European session and trades below 1.1300 as the greenback continues to gather strength on rising US T-bond yields. The data from Germany showed that Factory Orders increased at a stronger pace expected in November but failed to help the shared currency find demand.

USD

Fed minutes were relatively hawkish which triggered increased expectations of an early rate hike in March. The dollar reversed losses after the Fed minutes, although gains were limited against low-yield units.

The Fed at the end of last year lifted rate projections to three rate hikes this year, three hikes in 2023 and another two in 2024. This more aggressive stance is now accompanied by even more aggressive guidance that the rate lift-off could arrive “sooner or at a faster pace than participants had earlier anticipated.” This would imply that the start of the tightening cycle could match the projected end of net asset purchases in March.

FX Street Technical Analysis- 06th January 2022

Today’s Rates

GBP>EUR – 1.1948

GBP>USD – 1.3526

EUR>USD – 1.1324

GBP>CAD – 1.7267

GBP>AUD – 1.8875

GBP>SEK – 12.323

GBP>AED – 4.9668

GBP>HKD – 10.549

GBP>ZAR – 21.330

GBP>CHF – 1.2413

  Today’s Calendar 

·      EUR    Harmonized Index of Consumer Prices (YoY)(Dec)

·      USD    ISM Services PMI(Dec)

  Today’s Highlights

·       Forex Today: Yields rise on hawkish FOMC outlook, dollar regathers strength

·       EUR/USD Forecast: FOMC Minutes remind sellers of Fed-ECB policy divergence

·       BOE: Year-ahead output price inflation seen at 4.5% in three months to December 2022

·       GBP/USD retreats towards 1.3500 amid Brexit woes, firmer US dollar

 (https://frank-exchange.com/)

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