GBP/USD : Weak Dollar
(Wed, 13 Jan 2021). GBP/USD has now recovered all the ground lost last week, suggesting again that last week’s losses represented a healthy correction within an uptrend and that the move higher could well continue. The latest move reflects a weaker US Dollar prompted by a decline in Treasury yields from their recent highs.
GBP/USD RESUMES UPTREND
The uptrend in GBP/USD, in place since last September, looks to be resuming after last week’s correction lower – with the chart suggesting further gains to come. The latest move reflects a weaker US Dollar, which is suffering from a move lower in Treasury yields after their recent gains.
Talk of an economic recovery later this year, hopes that President-elect Joe Biden will ramp up the US coronavirus vaccine program and the prospect of more fiscal stimulus are all dragging on the safe-haven US Dollar.
Note, though, that GBP is also independently firm, strengthening against currencies such as the Canadian Dollar, the New Zealand Dollar, the Japanese Yen and the Australian Dollar.
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