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Morning Brief: 20/04/2021
The US dollar is crumbling in early Tuesday trade as yesterday’s sell-off in the greenback starts to accelerate. Even rising US Treasury yields and the fact that falling Asian stocks are failing to stop selling towards the US dollar.
Appetite for riskier currencies, and indeed riskier assets, is causing the sell-off in the buck. The US dollar index has fallen towards a fresh seven-week trading low as yesterday’s move down continues.
Earlier today the Reserve Bank of Australia meeting minutes were released, which revealed that the Australian central bank is still concerned about high unemployment. The People’s Bank of China also kept rates unchanged during their meeting earlier today as widely expected.
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Risk-on sentiment is helping to send the EURUSD pair higher this morning, as the EU announced that they have secured around 50 million additional Pfizer/BioNTech doses while the Johnson and Johnson vaccine supply issues get resolved.
This is helping to lend support to the single currency, amidst expectations that the eurozone recovery will speed up with the rollout. Rising German bund yields are also helping to keep the EURUSD pair on the front foot.
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Sterling is rallying above the 1.4000 level, marking a 300-point gain for the GBPUSD pair since last Friday. Pound and FTSE100 traders now look to UK jobs and wage data for direction.
Commodity currencies are also picking up steam this morning against the US dollar today. The AUDUSD, NZDUSD, are benefitting from renewed demand for commodities and positive market sentiment. The Canadian dollar is also rising as oil prices trade close to 1 percent in the green on the day.
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Tensions are on the rise towards Russia in the west, with some reports in the United Kingdom and United States media both reporting that Kremlin is ramping up pressure towards Ukraine. This story continues to simmer in the background, despite the risk-on mood in markets.
Bitcoin is also under pressure again today alongside the broader cryptocurrency market. No fresh bearish news, and the technicals are worsening as the BTCUSD pairs weakens below its 50-day moving average.
Data Watch
The economic calendar in the European session is focused on UK and EU data points. UK jobs data is largely known with solid beats already, and market participants now turn their attention to the ECB Bank Lending Survey.
Traders that are not aware the BLS provides input to the ECB Governing Council’s assessment of monetary and economic developments on which it bases its monetary policy decisions.
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During the United States trading session a 52-week bond auction from the United States comes into focus. Oil traders also look to the latest API crude oil stock report, on the back of last week’s large supply draw.
