Monex: Opschorten AstraZeneca-vaccinaties in meerdere EU-landen drukt op euro

March 16, 2021

This is a commentary by Ima Sammani, FX Market Analyst at Monex Europe.

EUR
Yesterday’s session included a modest loss against the dollar amid broad USD strength while setbacks in AstraZeneca vaccines weighed on the euro. Germany, France, Italy, Portugal and Spain joined the growing list of countries to suspend the Astra vaccine after the Netherlands halted the shot on Monday, causing yet another delay in the EU’s inoculation programme. EURUSD continues to trade in the middle of last week’s range despite the European Central Bank’s efforts to ramp up bond-buying to drive down yields, signalling that virus conditions, the lockdown situation and the vaccine roll-out continue to dominate euro price action. 

USD
The US dollar rose moderately vs most G10 peers yesterday, with the dollar index rising 0.16% over the day in the absence of fundamental drivers. The increase extended through this morning ahead of US retail sales at 13:30 CET and tomorrow’s FOMC meeting. The retail sales are set to show a correction from January’s over the odds spike that occurred after the distribution of the $600 individual checks as part of the fiscal stimulus bill in Q4 2020. Consensus sees the core reading falling by 0.3%. At 14:15 CET, US industrial production is set to show a mild correction to 0.6% from last month’s 0.9% following a similar narrative of a correction from January. Both readings could induce some trading opportunities for USD traders, although movements in fixed income markets will likely continue to dominate FX price action today along with any developments in risk sentiment.

GBP
Sterling tested breaking lower against the dollar yesterday as news of potential EU sanctions over breaches in the Brexit trade deal weighed on sentiment. However, the pound remained resilient as the dollar broadly traded weaker, providing sterling with a level of security. In addition to this, comments from Bank of England Governor Andrew Bailey leaned to the hawkish side ahead of Thursday’s meeting. Speaking with the BBC, Bailey stated that the rise in back-end yields, which have filtered into higher interest rates in parts of the economy, “is consistent with the change in the economic outlook”. Today, sentiment around the pound remains weak with GBPUSD sitting 0.5% lower.