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  4. USD broadly weakens against its major counterparts, with EUR, GBP and CAD both on the rise

USD broadly weakens against its major counterparts, with EUR, GBP and CAD both on the rise

•EURUSD up given new updates on vaccines and retreat on yields
•GBPUSD rebounds to monthly peaks amid weakening USD
•CAD continues the uptrend with housing starts hitting record high

USD sank sharply against major peers on Tuesday, with EUR leading the rally given a bright outlook on the vaccine supply. The EU has secured an additional 100 million doses from BioNTech and Pfizer, a news that undoubtedly encouraged investors. On the other hand, USD has already been losing momentum as the US bond yields retreating from its 14-month peak. The 10-year yield hit a one-monthly low of 1.529% last week but has re-gained some of the losses since then, currently ticked back up to 1.615%, still below its March peak at 1.776%. EURUSD is currently trading at 1.2063, up about 0.18%. On this coming Thursday, ECB will hold its April policy meeting; French and Eurozone confidence data are also due on the same day. On the other hand, we will see the release on US jobless claims, which may also impact the direction on this pair.

GBPUSD also surged due to USD’s weakness. As a safe haven currency, a combination of inflation in the US and higher global recovery hopes have led to selloffs on USD across the board. The pair is currently trading at around 1.3999, up about 0.10%. The February job market report in Britain will be published tomorrow, followed by Wednesday’s inflation rates. Towards the end of the week, UK retail and PMI results will also be published and may transfer some of the impact into the FX market.

CADUSD continues the uptrend, currently trading at 0.8001, up about 0.33%. Canada’s housing starts rose 21.6% in March compared with the previous month, easily beating the expectations and refreshing its record high. The seasonally adjusted annualized rate of housing starts rose to 335,200 units in March, well ahead of analyst expectations for 250,000 units. Some economists believe that new home construction will likely be a major contributor to overall GDP growth again in 2021. Canada’s average home selling price has also soared by 31.6% on a YoY basis in March, much due to supply constraints. Thus, the price would potentially be balanced by the strong starts.