Rates as of 0500 GMT
Wow! The dollar got absolutely CLOBBERED! Moreover, its hard to attribute the move pin the blame? on anything in particular. Normally I would assume such a big move might be in response to some huge riskon mood in the markets, but both European stocks and US stocks were lower yesterday. Theres no specific trigger or catalyst that I can find.
EURUSD rose back over 1.20 for the first time since March 4th even though US long yields rose marginally more than core European long yields. This reversed the recent trend, which has been for Europen yields to rise faster than US yields, narrowing the gap between the two one of the factors supporting EUR recently. Perhaps FX investors paid more attention than stock market investors did to the news that the EU had secured and additional 100m doses of the PfizerBioNTech vaccine, bringing the total to be delivered this year to 600mn.
But maybe oh reason not the need is the key phrase today theres no particular trigger for why GBP shouldve led the pack, either. It rose steadily throughout the day, although GBPUSD failed to poke its nose over the crucial 1.40 line, the next big resistance. Just playing catchup after last weeks declines? If you remember the graph I had yesterday of speculators positioning Ill repeat it for those who dont, no extra charge, last week specs increased their long GBP positions. Maybe theyve just decided the rout has gone far enough.
I have to say I was more…