Currencies and oil: Swiss franc slips back, although the pound remains strong

  •   26/02/2021 - 12h39
  •   DEHOUI Lionel

The beginning of the week was marked by a number of economic topics. For example, the spectacular closing of the Paris Stock Exchange in the green of the Paris Stock Exchange was attended by all the players in the sectors. A situation that could not prevent the enormous fall of the Nasdaq. But now is the time to learn about the different currencies.

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Currencies and oil: Swiss franc slips back, although the pound remains strong

Currency fluctuations

Just hours after the Federal Reserve (Fed) Chairman's remarks to the U.S. Senate, Forex traders remain less enthusiastic. Forex traders are reacting relatively little to Jerome Powell's statements. For example, the greenback is gaining a few fractions ahead of the Euro at 1.2140 (essentially flat). The greenback is down 0.3% against the pound sterling. The latter continues its rally towards 1.4100/$ due to the deconfinement option in 4 months time.

For its part, the Swiss Franc makes a spectacular move and attracts all the attention by devoting -0.9% to 0.9030. This follows its 0.90 drop the day before in intraday trading. As a result, the Swiss currency is back to the lows of a few weeks ago (4 and 5 February).

At the same time, the dollar also gained 0.2% ahead of the yen, which was already in a downward trend before Jerome P's remarks.


The conditions necessary for recovery

The Federal Reserve Chairman was speaking as part of his bi-annual testimony on the Fed's monetary policy. After this Senate hearing, it is clear that the long-awaited economic recovery will take time.

There will therefore be monetary support until Q1 of next year, unless there is a rapid recovery in employment. In these circumstances, vaccination appears to be the decisive factor capable of promoting a return to normalcy.

It should also be noted that the provision of support to disadvantaged US households is the responsibility of fiscal policy. In other words, it depends exclusively on the distribution of tax revenues.


Consumer confidence

In general, it is obvious that the greenback (dollar) has not been influenced in any way by the publication of U.S. consumer confidence. In the month of February, consumer confidence improved sharply.

In fact, during February, the U.S. consumer confidence index came to 91.3. However, in January, it was 88.9 , even though it was 89.3 according to a first estimate.

In the end, it is clear that this economic indicator is above the consensus of 91. In the same vein, the component of consumers' judgment of their current situation has made a net and remarkable increase. It has made a spectacular rebound from 85.5 to over 92.

On the other hand, the component that informs about expectations deteriorated sharply. This decline cannot go unnoticed in the current economic environment. From January to February, this value fell from 91.2 to 90.8.


Oil prices

Finally, it should be noted that oil prices have been modestly influenced by API (American Petrolium Institute). They achieved a slight, but surprising increase of one million barrels for U.S. crude oil inventories. Brent is traded at $65.37 a barrel, while U.S. light crude is down 0.39% to $61.43.