Dollar weaker on jobs data; equities rally
Today marks one year since Covid-19 was declared a pandemic by the World Health Organization (WHO). Over the last year, an unprecedented amount of monetary and fiscal stimulus was enacted by the global economy and equity markets staged the fastest market recovery ever. The US is ready to implement another Covid relief program and President Biden is scheduled to address the nation and lay out plans for the next phase of recovery in the United States.
"You may have to fight a battle more than once to win it.”
March 11, 2021
EUR/USD 1.1942 GBP/USD 1.3944 USD/CAD 1.2600 AUD/USD 0.7754 USD/JPY 108.68 USD/CNH 6.4941 USD/ILS 3.3043 USD/MXN 20.7568 USD/CHF 0.9265 USD/INR 72.9150 USD/BRL 5.6105 USD/SGD 1.3422 USD/DKK 6.2260 USD/SEK 8.4965 USD/NOK 8.4586
As expected, the US House passed Biden’s relief legislation yesterday. The President is expected to sign the package tomorrow. This week’s 10-year bond auction generated sufficient demand which placated investors’ fears of inflation. As a result, equities rebounded and the US dollar fell to a weekly low. Jobless claims fall to five-month lows as the US shows signs of economic recovery.GBP
The pound made gains versus the dollar today largely driven by dollar weakness. The pound remains strong amid the UK’s progress on Covid vaccinations, expectations of interest rates holding, and signs of economic recovery.EURThe euro rose to week-highs following the more dovish than expected ECB statement where President Christine Lagarde noted that risks have become more balanced. As anticipated the ECB left rates unchanged and noted that PEPP can be flexible to limit economic impact of upward pressure on yields.CADThe Canadian dollar hit two-week highs driven by the USD’s decline as markets opted for riskier assets. BoC deputy governor Laurence Schembri will speak today on household spending.ASIA/PACIFICThe Japanese yen underperformed G-10 peers as appetite for equities reduce demand for safe haven assets. Commodity currencies like the Australian dollar were buoyed by risk on sentiment.
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