The Pound strengthened yesterday following a surprise decrease in unemployment in the UK after the release of the latest jobs report.
While this boosted the currency, the ongoing spread of the Indian coronavirus variant is causing concerns for investors and the impact it will have on the economy. At the end of trading on Tuesday, the Pound finished at 1.1607 against the Euro and 1.4189 according to the Foreign Exchange Market.
There was some solid support for the Euro on Tuesday as the single currency took advantage of its negative correlation with the US Dollar after the Greenback suffered from selling pressure. There was also an increase in optimism across Europe as more countries continued to release lockdown measures while opening up the economy and continuing the vaccine rollout.
However, it was a different day for the US Dollar as it found itself on the defensive following the European trading session. Demand for the safe-haven currency waned following an improvement in risk-on mood while sentiment. Along with this, there are expectations that the Federal Reserve will continue with its accommodating monetary policy, regardless of increasing inflationary pressures from across the country.