Monex: Dollarzwakte stuwt GBP/USD naar hoogste niveau dit jaar

Monex: Dollarzwakte stuwt GBP/USD naar hoogste niveau dit jaar

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Gemengd Geld euro dollar pond.jpg

Hieronder volgt een kort commentaar in het Engels van Ranko Berich, Head of Research bij Monex Europe op de Amerikaanse dollar, euro en het Britse pond.

GBP

Sterling moved higher against the dollar and the euro yesterday and was among the best-performing major currencies amid a general retreat in the greenback. The rally in GBPUSD has seen the pair trade to its highest level this year, but this should not be mistaken for a vote of confidence by markets in the UK macro outlook. US dollar weakness, driven by the uniquely bad coronavirus situation in the US and a changing outlook for Fed policy, has been behind most of the rally. At the margin, an ongoing fiscal impasse in Washington has seen the dollar take yet another leg lower in recent sessions. Against the euro, which is a better proxy for the UK’s effective exchange rate, sterling has not even regained March’s pre-COVID highs, let alone any significant levels. This week’s round of trade talks with the EU has gotten off to a rocky start, with Brussels reportedly rejecting UK demands for access to the EU for British truckers. Negotiations will resume today. The EU commission has said that allowing the requested level of cabotage rights within EU states would be “fundamentally unbalanced” and too close to pre-Brexit market access given the UK’s lack of commitment to the EU’s desired “level playing field” commitments. October is viewed as the latest an agreement could be struck and ratified this year.

EUR

The euro continued to benefit from broad dollar weakness in yesterday’s session, reaching fresh highs for the sixth consecutive day while remaining unchanged over the week against sterling. Former European Central Bank President Mario Draghi warned yesterday that the pandemic “threatens to undermine the fabric of our society as we know it” and that young people “will be left with a lack of professional qualifications and experience, compromising both their freedom of choice and their earning potential later in life”. His speech sent a message to markets that the debt created in the pandemic should be used to invest in young people, innovation and research. Today’s FOMC minutes will be of interest for the euro, while the 3Q Norges Bank expectations survey is not likely to go unnoticed by EURNOK.

USD

The greenback was once again on the back foot yesterday, incurring losses to most major currencies and reaching significant lows against sterling and the euro. The narrative as to why the dollar is weakening hasn’t changed too much over the last few weeks and continues to be centred around political deadlock and a slower growth outlook. Today, in the wake of US equities touching fresh highs, Asian equities trade mixed with US-Sino tensions leaving doubts in the market. The Trump administration wants university endowments to divest Chinese holdings with the State Department warning colleges it would be “prudent” to get ahead of potentially more onerous measures. It must be noted that the weaker dollar is putting up more of a fight in this morning’s market than it did yesterday, however, with losses against GBP and EUR relatively muted. This evening’s release of the latest FOMC meeting minutes will be the primary focus for investors judging by today’s data calendar. The main area of contention in the minutes will be the assessment of whether the financial framework review will be completed by September’s meeting or November. With yield curve control, negative rates and even forward guidance on QE sitting in the Fed’s toolbox, none are likely to be imposed until the framework review is completed. Commentary on members assessments of these tools will be combed through regardless, along with the assessment of the US economy.