The pound has been struggling quite severely this month, as it dramatically fell against the dollar and euro this month. The Brexit deal signed in December and the whole country’s COVID lockdown did not help the pound thrive. Medical and political experts theorize that the following few weeks of the pandemic might be the worst so far in terms of people hospitalized.
The prospect of ever-tighter restrictions in the UK because of the new virus variant means that the economy will contract more in the first quarter of this year.
Bank of England policymakers predict quite negative rates at 1400 GMT shortly. In fact, last week at 1148 GMT, the pound was down 0.5% on the day versus the dollar, at USD1.3493. Versus the euro, it was flat at 90.17 pence. Following future weeks, the pound may fall to around USD1.32-USD1.33 and 92-93 pence per euro.
Greenback bounce from 2018 low continues after U.S. jobs report
on Friday after a dismal December U.S. payrolls raised expectations for further stimulus measures to prop up an economy. As a result, The dollar turned higher against a basket of major currencies.
The Labor Department report stated that nonfarm payrolls decreased by 140,000 in December. In fact, that was the first decline in eight months; this was way below expectations that called for a still-weak increase of 71,000 jobs.
EUR/USD manages to reverse, albeit partially, the recent downside and rebounds from lows in the vicinity of 1.1950 on Friday, the area last visited in early December 2020.
Will Surging Dollar Hit Indian Ruppe?
The rupee is likely to lose and edge much lower against the US dollar. Thus pushing traders to buy the latter. The Indian rupee extended its weakness and opened 10 paise lower against the US dollar on Tuesday dollar is expected to gain in the short term. Thanks to the newly elected US president and his quick work on eliminating political and fiscal uncertainty in that country.
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