Gold prices traded quietly in a narrow range towards a decline during today's session, in…
GBPUSD reaches its highest level due to the US fiscal stimulus
GBPUSD Weekly Outlook – 9th February 2021
Updated on [lmt-site-modified-info]
GBPUSD expanded its trading gains in the European market, registering the fourth consecutive daily rising. These gains come in light of the decline of the US dollar, along with the shrinking possibilities of the British central bank adopting a policy by reducing interest rates to the negative level.
GBPUSD traded at $1.3788, the highest since April 2018, adding 0.4% gains, from today’s opening session at $1.3737.
In the last meeting of the Bank of England that ended last Thursday, members of monetary policy said in the closing statement that British banks need at least six months to be ready to change interest rates to the negative level, which reduced expectations of a rate cut soon.
GBPUSD rises with the start of using the Coronavirus vaccine
Analysts believe Britain’s progress in giving coronavirus vaccines is helping to shore up the pound.
The US dollar continues its losses for the third day in a row.
The US dollar index (DXY) is in its third consecutive day in the red, as forex investors react to the recent non-farm data and US stimulus.
The index is trading at 90.70 points, which is 1% below Friday’s high of 91.57 points.
The double deficit in the United States
The weakening of the dollar index began on Friday when the US released weak employment numbers. In total, the country created only 40,000 jobs in January after shedding 140,000 the previous month, so investors believe the US economy will take longer to recover.
Meanwhile, politicians are trying to pass another stimulus package worth $1.9 trillion, and this will raise the total stimulus to more than $2.8 trillion. As such, some investors are concerned about the double deficit in the United States, this indicates the widening budget deficit and trade deficit.
The US dollar is also declining ahead of the latest US inflation numbers due to be released later in the day, and economists are expecting data to show the core and core Consumer Price Index (CPI) rising 1.5% in January.
However, there are signs that the rate of inflation will reach 2.0% later this year.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.