- Dollar Off Lows Against Pound and Euro
- Other Factors Help Retain Some Positivity
- Big Tech Slammed on Wall Street
The week has started off on the back foot for many trading in not only the forex market but the wider equities markets. Strong moves to the downside to start the week have managed to lift the Dollar from the lows it had hit in the wake of the US jobs data miss at the end of last week. Both Euro and Pound have lost some ground by still trade at good levels with many positive factors in their favor heading into this week. Meanwhile, on Wall Street, the tech-heavy NASDAQ, in particular, has posted big losses as inflation fears persist.
Euro and Sterling Steady Despite Dollar Bounce
Despite moving from high levels, the Euro still continues to trade above 1.21 even as the USD regains major strength as a safe haven for many fearing an economic overheat and retreating to the currency. On the European side, the currency remains bolstered by an ever-improving COVID-19 vaccination campaign and the fact that almost 30% of the entire region have had at least 1 shot with cases continuing to fall across the bloc.
In the UK Sterling continues to trade near recent highs ahead of a busy day where the Queen will speak for the first time since the death of her husband in what marks the reopening of the British Parliament. It is an important event that provides an opportunity for the government to lay out its plans for the months and year ahead and is typically watched closely by traders.
Reopening Continues to Prove Positive
Although there was a surprising miss on US job numbers last week, and the markets have taken something of a beating especially in the trading session yesterday, there are still a number of positives for those forex trading. A look at the UK shows that reopening continues apace and with the EU also moving in this direction, the broader outlook is positive. This is reflected in the strength of both currencies.
The Federal Reserve in the US alongside counterparts in the ECB and Bank of England also look set to continue promoting the positive message that they remain committed to supporting the economy. They are also doubling down on commentary that they believe any inflation to be transitory as forex brokers continue to see an advancing Dollar.
Tough Day on Wall Street as NASDAQ Leads Losses
Records are made to be broken and yesterday unfortunately saw the main indices drop off their previous record highs. These were led by the tech-heavy NASDAQ which lost more than 2.5% in the session.
These losses seem to stem from continued fears around inflation and the possibility of raising rates which have hit these fast-growing tech names. Other sectors of the economy continued to take advantage of this rotation, particularly infrastructure, and commodities with many of the latter remaining in short supply relative to the demand.