GBP/USD hits one-week lows in risk-off trade - buidelps1967

GBP/USD fell to a one-week low on Monday, as the greenback held on to recent gains. Still, prospects for the Sterling remain rather positive, analysts noted, while the latest CFTC futures data revealed the largest net long position on GBP since last Marching.

With a no-softwood Brexit scenario now avoided thanks to a parting-minute EU-United Kingdom agreement in December, the Sterling is generally expected to gain priming against a weakening The States Dollar this year.

"The thump is a procyclical up-to-dateness, and the UK usually profits from investment inflows whenever spheric increase is irregular. Afterward umpteen years of Brexit stress and an undervalued pound this procyclicality might have an evening bigger impact than normal," UBS strategist Thomas Flury and economist Dean Nat Turner wrote in an investor note.

They besides underscored that "a successful rollout of vaccinations in the first half of 2022 and an easing of restrictions in the United Kingdom, the US, and the quietus of the world is, however, a necessary condition for this to exhaust."

The US Dollar Index (DXY) extended gains from last Friday and insane a one and only-month high of 90.901 on Monday, arsenic softening US macro data and a surge in new COVID-19 infections globally prompted caution among market players.

Friday's story on USA retail sales revealed a third consecutive month of decline in December, which brought forth concerns over recovery, especially as health authorities had warned that the worst of the latest wave of coronavirus infections might just lie ahead.

"The market is in a bit of a await and see mode debating well-nig the dollar, in terms of whether higher U.S. yields could ply support or whether we see further decline," Swear of Singapore up-to-dateness analyst Moh Siong Sim was quoted as expression aside Reuters.

"I think the balance of risks is still in party favor of a reflationary environment, and therefore risk sentiment should remain positive and we should realize a further dollar decline."

Meanwhile, President-elect Joe Biden is to be inaugurated in a heavily-guarded Washington later this week, with tensions remaining elevated following mob furiousness several weeks earlier.

As of 10:07 GMT on Mon GBP/USD was edging down 0.35% to trade at 1.3529, after earlier touching an intraday low of 1.3520, or its weakest level since January 12th (1.3503). The John Major pair has retreated 0.94% so removed in January, pursuit a 2.54% surge in December.

Mon First Baron Marks of Broughton Martin Luther King Jr. Day federal vacation in the U.S.A. Financial markets in the land are to remain unopen.

Bond Yield Spread

The spread between 2-class US and 2-yr UK bond yields, which reflects the flow of funds in a short term, equaled 27.4 base points (0.274%) equally of 9:15 GMT on Monday, down from 28.1 basis points on January 15th.

Time unit Pivot Levels (traditional method of calculation)

Central Pivot – 1.3616
R1 – 1.3659
R2 – 1.3741
R3 – 1.3784
R4 – 1.3828

S1 – 1.3533
S2 – 1.3490
S3 – 1.3408
S4 – 1.3325

Source: Miroslav Marinoff, a news editor at TradingPedia, is engaged with perceptive and reporting on the tendencies in the Foreign Commutation Market and the US Stock Grocery store.

Source: https://www.tradingpedia.com/2021/01/18/forex-market-gbp-usd-touches-lows-unseen-since-january-12th-as-the-new-trading-week-begins-in-a-risk-off-mood/

Posted by: buidelps1967.blogspot.com

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