The Pounds Climb Against the Dollar- Some Reference Points

24 בפבר׳ 2021

The pound has been incredibly strong against the dollar through early 2021 and it has peaked out at 1.42418 following some sharp downward momentum. Here are some potential reference points for this week as well as some longer term POI's that might come into play in the near future. The Pound's rate is at a similar level as 2016 yet interestingly enough the US 10 year bonds are at levels similar to 2012 lows and though they seem to be recovering from almost nothing. None the less, the Dollar still may be in trouble on a short term basis. Cash has been printed on a widespread basis and there is a now seemingly exponential growth to the money supply in the US compared to normal trends. Compared to Asian counterparts, the Dollar has preformed seemingly well with similar equity market conditions which brings me to my next point. As the dollar continuously loses value, and the potential growth sector in the US equity market corrects, it raises the question: has the US moved out of the euphoric market state into recession like trends? I choose to take the standpoint that though the outlook may be grim, no, there is not a recession on our hands and the dollar is likely to recover some of its losses within the year as long as the Fed keeps a steady hand.