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USD the worst performing major currency last week

19 Apr 2021

Traders are eyeing Thursday’s European Central Bank (ECB) meeting that will result a monetary policy decision as the Euro-to-Dollar exchange rate trades at 1.1979. This is the Euro’s longest stretch of unbroken gains this year. Strategists noted “various fundamental factors behind the firmer tone in the currency pair stemming from both the Eurozone and US. Technicals”. The improvement of the coronavirus infections has been a strong factor. According to an IHS PMI survey, the Eurozone handled the coronavirus pandemic better than what originally thought by the ECB. 

Moreover, U.S. bond yields declined in April, leading the USD to be the worst performing major currency last week. “Although we remain positive on the USD for the rest of the year, the short-term risks are for further weakness,” experts said. “Our investor flows have turned once again negative for the USD, particularly in the case of real money.” 

In addition, the Pound-to-Dollar exchange rate is trading 0.30% higher at 1.3895 at the time of writing. Traders seem to have turned back to the USD, which could hinder the Sterling’s continuing increase. Results are being awaited from “a test of the 55-day average, price resistance and potential downtrend at 1.3838/55, with fresh sellers expected here at first.” 

Foreign exchange strategists at HSBC are encouraging traders to opt for the EUR/GBP pair, in hopes to see the Sterling decline.