Rates as of 0500 GMT

Market Recap

Wow! What happened to GBP overnight? No idea. Neither Bloomberg nor Reuters nor anyone else I could find had a good explanation of why GBP basically collapsed. It seems to have been a reaction against the big move on Monday April 5th, which took place while the UK was out for the Easter holiday.

For GBPUSD, all that happened was that it unwound Mondays gains. The real move was vs EUR. EURGBP moved up substantially shown as down in the graph below, to make the movement in the two pairs comparable. If you look at the graph at the bottom of this comment, youll see that EURGBP was the biggest mover of any of the pairs I track, rising 1.03 on the day.

In fact, looking further at that graph, you can see that EUR gained vs USD and AUD as well but not JPY and CHF. So perhaps what we saw was not so much GBP weakness as EUR strength expressed through EURGBP.

Why would that be? Well perhaps it was related to an inflow of money into European stocks, which hit a record high yesterday. US markets by contrast pulled back a bit from Mondays record highs.

There was some renewed optimism about the EUs progress on vaccination. Bloomberg reported that the European Commission said most member states will have sufficient vaccine supplies to immunize the majority of people by the end of June, assuming no further problems with the OxfordAstraZeneca vaccine I hope not, as Im scheduled to get my second shot in June.

EUR strength may also have been the…