What Happened
- The battle against COVID-19 continues, but with more approved vaccines and better rollouts
- The buck closed February in positive territory per the Bloomberg Dollar Spot Index, barely changing after big inconsistent rallies
- Euro fortunes improved as the European Union secured its inoculation plans and Italy welcomed Mario Draghi as new Prime Minister
- Pound Sterling continued its good run as the health of the country advances
- U.S. Congress remains tied up in working on a much-awaited rescue package
Tempus’ View
- The last month of the first quarter will determine if the pandemic’s economic woes are easing
- Concerns over rising yields and possible inflation could increase FX volatility
- Euro could have room for depreciation as the European Central Bank discusses the need to maintain a loose financial environment
- We feel that the Sterling may be a bit overvalued and could fall if the Bank of England increases quantitative easing
- March will hopefully mean further progress in reducing infection and re-opening business
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