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Pound highest in 3 years

TAKEAWAYS


•    GBP/USD rallies above 1.41 to a 3-year high
•    Dollar ended lower, reversed early gains after Fed’s Powell promises ongoing low rates
•    Tesla stock is back at its pre-S&P 500 index inclusion price in steep sell-off
•    Popular Cathy Woods ARKK Invest ETF slumps on huge volume amid tech sell-off
•    Bitcoin fell back below $50,000 with Ether below $1500
•    Square adds $170 million in Bitcoin
•    Nasdaq finished lower again amid tech sell-off but rebounded off 50 DMA
•    European airline stocks jumped after UK revealed plans to exit lockdown restrictions
•    Gold dipped after recent rally but held onto $1800 per oz
•    Crude dropped after surprise inventories build 
•    DAY AHEAD: RBNZ rate decision, Powel testifies again


GURU WISDOM


“I never took a day off in my twenties. Not one.” — Bill Gates


MARKETS


*Daily closing price
↘ EUR/USD    1.2146        (-0.07%)
↗ GBP/USD    1.4111        (+0.36%)
↗ USD/JPY    105.25        (+0.19%)
↗ S&P 500    3881.37    (+0.13%)
↗ Dow Jones    31,537.35    (-0.05%)
↘ Gold        1805.43    (-0.18%)
↘ Oil (Brent)    64.19        (-1.61%)
↘ Bitcoin    48,388.1    (-10.58%)


NEWS


The 4-stage plan to ease covid-19 restrictions in the UK propelled the British pound to a 3-year high and over 1.41 and helped gains in European travel stocks, including the major airline groups. FX traders have been pricing in a strong UK recovery in the last month thanks to the successful vaccine rollout and its implications for reopening the economy.

Cryptocurrencies sunk again on Tuesday. Bitcoin crashed 10% in another huge daily swing, taking it back below $50,000 and Ethereum’s Ether back under $1500. The crypto market is still reeling from recent comments from enthusiast Elon Musk as well as Fed Chair Janet Yellen inferring tighter regulation.

The Nasdaq was under pressure again thanks to the ongoing weakness in tech stocks but ended off the lows after finding support at the 500-day moving average. Tesla shares fell heavily at the open on Wall Street but climbed back to close 2% lower. US yields were little changed today after days of rising inflation expectations, which limited the damage for tech. 

Supportive comments from Fed Chair Powell about the ongoing need for loose monetary policy saw tech stocks bounce off the lows, the dollar came off its highs and gold end slightly lower but above $1800 per oz.

 


DAY AHEAD 


*Times in GMT
01:00 - RBNZ Interest Rate Decision [0.25 % Exp vs. 0.25 % Prev] 
02:00 - RBNZ Press Conference 
07:00 - Gross Domestic Product (QoQ)(Q4) [0.1 % Exp vs. 0.1 % Prev]
15:00 - Fed's Chair Powell testifies
 

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