US Dollar Races to Multi-Month High While Pound Loses Ground

The Pound lost ground against many of its rivals on Wednesday as it reacted to concerns surrounding Brexit, as it continues to weigh heavily on the currency.

The Brexit Minister did stand down from almost triggering Article 16 but this did nothing to ease the concerns of investors in relation to trade between the UK and EU. As a result, the Pound finished the day at 1.1677 against the Euro and 1.3412 against the US Dollar according to the Foreign Exchange Market.

The Euro dipped yesterday as German government advisers changed their growth forecasts for 2021, dropping it to 2.7% from 3.1%. There was more pressure added to the woes of the single currency as the US Dollar strengthened, strengthening the negative correlation. 

The US Dollar performed well yesterday and volatile trading couldn’t throw it off course. US inflation reached a new 31-year high of 6.1% and this increased the likelihood of the Federal Reserve hiking rates much sooner than expected. There were also more bids as a result of the jobless claims figures as they hit the lowest figure seen during the pandemic.

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