Pound-Dollar Week Ahead Forecast: Recovering Footing and Eyeing Return to 1.40

The Dollar remained an outperformer among major currencies on Friday although its strength was abating after February non-farm payrolls report revealed a sharp increase in new jobs last month, around the same time as trade balance data showed U.S. imports growing faster than exports in the New Year.

Foreign exchange analysts at ING Bank have given their view of what the 2021 budget might mean for Sterling, saying it will likely be a net giveaway that aids the upside case for the currency.

The U.S. Dollar rose broadly ahead of the weekend in response to highly anticipated comments of Federal Reserve Chairman Jerome Powell which appear to have stoked the rally in U.S. bond yields.

Despite being the best performing major currency of the past week, and being a mid-performer in the G10 this year - foreign exchange analysts remain unshaken in their view that 2021 will be a year of decline for the currency.

The U.S. Federal Reserve Chairman Jerome Powell is to sit down with the Wall Street Journal for an interview today and what he says could well dicatate market direction for the next two weeks.

The U.S. Dollar is now the best performing G10 currency of the past week and analysts say that those watching Pound Sterling should be prepared for a deeper correction lower before the current impulse of selling subsides.