Dollar’s Rebound Loses Momentum As Pound Increases on BoE Statement

Dollar’s Rebound Loses Momentum As Pound Increases on BoE Statement

The dollar came under selling pressure in America in the afternoon, as equities cut intraday losses and showed moderate gains and US Treasury yields increased.

Sterling generally jumped today after the head of the Bank of England criticized negative interest rates associated with many problems. Commodity currencies are currently the next strongest, having partially overcome this week’s pullback.

The head of the Bank of England said that negative rates are “a controversial issue” and there are “many problems” with that. He added that negative rates would complicate banks’ efforts to generate returns and could potentially hurt their lending.

On the other hand, the dollar is now the weakest of the day as the short-term recovery has lost momentum. The yen and the euro are the next weakest at the moment. Major pairs spent most of the day consolidating around Monday’s close amid improving market sentiment. However, in the absence of a clear catalyst, caution prevailed.
Managing COVID-19 Across Countries
Canadian Prime Minister Justin Trudeau announced on Tuesday that they have reached an agreement with Pfizer/BioNTech to purchase an additional 20 million doses of COVID-19 vaccine, Reuters reported. Canada will extend its border closure with the United States until February 21, Trudeau added.

As for the pandemic, the UK has 45,000 new cases, below all-time highs recorded last week. However, the authorities warned of an unstable situation in the health care system. German Chancellor Angela Merkel reiterated that the worst is yet to come, adding that the country is likely to have restrictive measures in place at least until April.

The good news came from Israel: An initial analysis by the Clalit Health Foundation, the largest healthcare provider in Israel, showed that 14 days after the first dose of Pfizer/BioNTech vaccine, the number of COVID-19 cases dropped 33%, an Israeli news publication Ynet disclosed. The country’s population is 8.89 million, and about 20% of the population has already been vaccinated.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.