Pound Strengthens Against Both the Euro and the US Dollar

It was a stronger day for the Pound on Thursday, with the Pound to US Dollar sitting just below a new two year high while the Pound to Euro rate also neared a two-month high according to the Foreign Exchange Market.

The current vaccination programme is gathering momentum and that bolstered the currency, helping it to navigate around the issue of high coronavirus cases. This morning, the UK GDP data release for November has seen a smaller contraction of growth than expected of 2.6%, helping to potentially give the pound more support. At the end of trading yesterday, the Pound finished at 1.1261 against the Euro and 1.3683 against the US Dollar.

The Euro edged lower yesterday after the minutes from the European Central Bank’s December policy meeting showed concerns around the Euro exchange rates. Along with market risk aversion, this meant that the Euro to US Dollar rate trended lower for the third day in a row.

The US Dollar retreated slightly on Thursday when it became apparent that the Federal Reserve would stand firm with its decision. Despite this, some losses were gained back after the stimulus announcement from Joe Biden did not cause investors to take risks. The latest US retail figures are likely to decide the direction in which the US dollar moves today.


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