- The US dollar extends its decline on all fronts during the US session.
- The pound prints new highs against the dollar, the euro and the yen.
The GBP/USD It broke above 1.3800 and rose to 1.3833, the highest level since July 16. The pound is rising for the fourth time in the last five trading days as it continues to rebound from the five-month low it hit last week at 1.3571.
The rally pushed the pair back above the 20-day moving average on Monday. The main driver is a general decline in the US dollar. The DXY is falling 0.37%, down from 92.55, even as US yields broke out of lows.
US stocks are on the rise, with the Nasdaq hitting new all-time highs. The improvement in risk sentiment helped the pound, which also rose against the euro and the yen.
With an eye on the Fed
The economic calendar shows a calm for the United Kingdom. “With little data, the markets will probably focus on the virus numbers. The response remains chaotic, with London Mayor Khan urging the Johnson government to relax isolation rules for anyone vaccinated who comes into contact with an infected person, “said analysts at Brown Brothers Harriman.
In the US, the key event will be the two-day FOMC meeting. ANZ analysts expect discussions about the reduction to intensify. “These will focus on timing, speed and composition. Recent comments from President Powell suggest that the Fed is a few months away from a phase-down announcement. ” They see the Fed clinging to the assessment of a strengthened economy and transitory inflation. “We do not anticipate any change in their guidance on fees or asset purchases.”