US Dollar buying extended following last weeks ‘hawkish’ stance now taken by the US Federal Reserve. Long term technical support levels for the Euro and Sterling have since been broken as the Dollar holds firm across the board. With global stock markets continuing to fall in Asia, this also triggered further ‘safe haven’ US Dollar buying despite US treasury yields giving back some of the gains seen from last Wednesday.

Since long term technical support of $1.3900 was broken, the Pound has not recovered, now trading at a two-month low and losing any momentum seen last week across a broad range of currencies. Sterling is also down 50 cents from the highs seen last week against the Euro. It would seem the political crisis in Northern Ireland created by Brexit is far from over. Many are now questioning a snap election there, should the coalition that shares power continues to divide rather than reconcile. The rises of infections seen in the Delta Covid variant will continue to be monitored by the UK government and its scientific advisors.

Major support of $1.1850 traded in Asia, this is likely to be the key this week. A close below here would likely add to increased US Dollar demand. ECB head Christine Lagarde speaks later today as policy makers remain divided over PEPP extension.