• GBPUSD rebound limited as US economic outlook improves
• GBPAUD follows an uptrend as Australia falls behind it’s vaccination schedule
• Short positions on JPY grows as job market presents mediocre performance
As both currencies show great momentum to go upward, GBPUSD exchange rate shows mixed results last week. After opening at 1.3868, it once plummeted to the monthly low of 1.3675 before eventually rebounding at the end of the week, closing at 1.3788. The pair has been volatile indeed, since signs for economic recovery are evident in both countries. Speculations that Britain will be one of the first major economies to fully recover from the pandemic continue to support the local currency. As of this week, groups are allowed to meet outside in England. For USD, we will see the release of US consumer confidence data tomorrow and the non-farm payrolls on Friday. Last week, stock market has seen select US media and Chinese tech stocks dropping heavily due to forced liquidation of Archegos Capital, a highly leverage US hedge fund. For this reason, many investors flocked to USD to limit their losses, further supporting the currency.
However, GBPAUD is quite another picture compared with GBPUSD. Over the course of this year, GBPAUD has been following an uptrend. As the UK vaccinates more than half of its adult population, Australia’s vaccination rollout has been slower than expected. Currently in Australia, only 500,000 people have been vaccinated, but the government had promised 4 million instead by this stage.
Short positions on JPY have grown recently due to falling bond yields and mediocre job market performance. The fact that Japan’s stock market has been quite steady – thanks to the government’s funds – has offered some support for yen, but it is still one of the worst performing currencies in this quarter, down about 6% against USD. Data released yesterday shows that, Japan’s jobless rate was steady at 2.9% and the availability of jobs declined from the previous month. Jobs-to-applicants ratio was 1.09 versus the forecast of 1.10.