Sign Up
19 Feb 2021
3 min read

US Futures Indicate Higher Open, Sterling Reaches $1.40

osprey logo
Written by OspreyFX News Team

US Futures Indicate Higher Open, Sterling Reaches $1.40

*OspreyFX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions and Risk Disclosure for more information.

Key Takeaways

  • US equity futures point higher in premarket
  • British pound breaks $1.40 thanks to positive UK economic data

US markets continue to hover near record highs on Friday as market participants carefully monitor the developments regarding the fiscal stimulus package proposed by President Joe Biden. Futures tied to the Dow Jones Industrial Average, the S&P500, and the Nasdaq Composite point to a higher open in premarket trading. Markets got another boost by the recent positive news regarding the $1.9tn American Rescue Plan.

In relation to this topic, Treasury Secretary Janet Yellen stated in an interview on Thursday that she expects the proposal to be enacted in the next couple of weeks. In her comments, she mentioned the fact that the President would like to see the package pass with bipartisan support. “We are digging out of a deep hole,” Ms. Yellen said as she defended the proposed financial aid that will help steer the US economy out of the slump. “We think it’s very important to have a big package that addresses the pain this has caused,” she said.

In January, the unemployment rate reached 6.3%, which is better than the 6.7% rate for December. However, this is still nearly double the rate before the Covid crisis hit in March last year. “Last year was the worst year for economic growth since World War II,” Secretary Yellen said. According to her, the real unemployment rate is about 10% because many people who lost their jobs since the coronavirus pandemic began aren’t officially registered as unemployed.

Too Little May Not Be Enough for the Economy

The Treasury Secretary rejected claims by Republicans that the proposed stimulus is too big as she supported the single measures such as the $1,400 stimulus checks and extended unemployment benefits. Furthermore, she stated that the Biden administration is planning to announce its infrastructure program later this year. The $1.9tn rescue package follows nearly $4tn of spending approved by the government last year in efforts to tackle the damaging effects of the pandemic.

“The costs of doing too little is much higher than the price of doing something big,” Yellen said. “I think the benefits will far outweigh the costs in the long run.” On the topic of inflation, Ms. Yellen dismissed concerns that big-ticket spending could trigger an increase in prices.

Elsewhere, the sterling this morning spiked above $1.40 for the first time in 34 months. The peak came after the GBPUSD shrugged off weak retail sales data followed by stronger-than-expected PMI data. UK Retail sales plunged by 8.2% versus the expected drop of 2.5%. UK Manufacturing PMI beat estimations with 54.9 versus the expected 53.2. Services PMI jumped to 49.7, significantly above the expected 41.0 while Composite PMI arrived at 49.8, beating estimates of 42.2.

The UK’s currency saw fresh demand and renewed buying waves as market participants lifted the GBPUSD to a high of 1.4008, levels not seen since April 2018. The recent climb comes on the back of a weaker US dollar across the board.

Subscribe to our newsletter to receive our weekly updates + more straight to your inbox!


  • This field is for validation purposes and should be left unchanged.