Following weeks of increasing rates, the Pound fell back slightly during trading on Thursday. This might indicate that the current run is coming to an end as investors begin to ready themselves for the Budget which is taking place next week.
According to the Foreign Exchange Market, the currency finished the day at 1.1520 against the Euro and 1.4006 against the US Dollar. As the week comes to a close, the Pound is likely to remain rangebound as it could see some volatility due to end-of-month profit-taking.
There was an improvement in economic sentiment this month and that helped the Euro to move higher yesterday. The relationship with the US Dollar also helped as its negative correlation helped it to take advantage of the US Dollar weaknesses. The main focus for investors today will be the current vaccine rollout and how that is progressing.
It was a defensive day for the US Dollar yesterday as investors dampened down their demand thanks to enhanced market sentiment. Despite this, the lack of demand was tempered because durable goods orders reached a six month low during January. Through today, the US Dollar could improve if the figures suggest that rebound spending increased during the beginning of the year.