Weekly Market Update 19 Feb 2021 – GBP and AUD end the week near 3-year highs
Weekly Market Update 19 Feb 2021 – GBP and AUD end the week near 3-year highs
1. The GBPUSD rose above 1.40 for the first time since April 2018, as traders were bullish on the significant improvements in manufacturing and service sector activities, despite the weak retail sales figures. The country’s vaccine rollout and falling infection rates also point towards a positive recovery and reopening of the economy.
2. Both AUD and NZD rose more than 1% against the dollar as coronavirus cases remain extremely low in both countries and as New Zealand exits a 3-day lockdown. The RBA provided an unexpected boost to the AUD, noting that the currency would normally be expected to be around 5% higher, and that upside has been dampened by the loose policy stance. This outweighed the mixed economic figures released, which showed business activities remaining in expansion territory in February, while retail sales rose less than expected.
3. Strong manufacturing activity in Germany and the Eurozone contributed to modest gains in the EUR. The ECB minutes released indicated that policymakers are committed to keep a steady hand on stimulus measures despite a recent rise in eurozone inflation, and favorable financing conditions are expected to be maintained without further stimulus.
