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US employment data question optimism over fast recovery, weakening USD and pushing up GBP; cryptocurrencies remain upward while precious metals have gone lower

BLOG February 19, 2021 at 05:32 am (GMT)

• USD clawing back some losses after heavy decline amid disappointing employment data
• GBPUSD hit nearly 3-year high after Johnson commented that lockdown may be lifted
• Gold continues to decline facing rising Treasury yield, but Bitcoin and Ethereum remain within rising channel

US Dollar was up a little bit on Friday morning in Asia, managed to claw back some losses after encountering its biggest decline in ten days due to the disappointing employment data. During the previous week, a total of 861k jobless claims were filed, against the forecast at 765k and a prior release at 848k. The data finally dented recent optimism for the country’s quick recovery, as the number still remains 6.7 times higher than the pre-COVID time. In the meantime, Biden continues to fight for his proposed $1.9 trillion stimulus package, which is still undergoing series of heated debate among politicians. In December, the government sent out a one-time check of $600 to individuals which helped to push retail sales a little bit.

Thanks both to the smooth vaccine rollout in the UK and the weakening USD, GBPUSD has been pushed to nearly 3-year high during Thursday’s trading session, reaching $1.3965. In the short term, it is likely to remain in the upward trajectory but beware that the impact of Brexit is yet to take effect. The sharp rise is primarily attributable to Johnson’s recent statement that, lockdown restrictions might be lifted in stages.

Amid rising Treasury yields, gold has since gone lower and may continue to fall. The rising yields indicate a higher risk-free rate, and as gold has no inherent yield, investors are shifting from it to higher return assets. On the other hand, unlike precious metals that have faltered, cryptocurrencies remain within the rising channel, supported by the rising demand for Bitcoin and Ethereum. As more major players in the market adopting Bitcoin as an alternative payment method, Bitcoin has gone all the way up to pass $50,000, resulting in a new all-time high at $52,648.