Thursday was an eventful day for the FX market but, somewhat surprisingly, most of the major currencies ended London trading not too far from where they began it.

Yesterday's ECB announcement delivered an unsurprisingly non-committal message from President Lagarde, although the meeting itself was far from a non-event.

The COVID-19 pandemic has presented a challenging period for the gulf currencies, particularly following the slump in oil prices at the start of the crisis. Read our Special Report to find out what to expect from SAR, AED, QAR, OMR, BHD, AED, KWD, EGP, and TRY.

This Thursday’s European Central Bank meeting will be the main event risk in the FX market this week.

A slightly underwhelming US nonfarm payrolls report halted the dollar rebound in its tracks late-last week.

Currency traders remained in a rather cautious mood on Wednesday, failing to commit to sizable positions in either direction ahead of Friday’s US payrolls report.

A rebound in commodity prices sent emerging market currencies higher last week as investors favoured high risk assets at the expense of the safe-havens.

Vaccination progress has been one of the most important determinants of exchange rates so far in 2021. We do, however, think that with the reopening of economies, vaccination numbers will be less relevant in the eyes of investors. Attention now turns to the performance of the G3 economies and the response of central banks to both the rebound in economic activity and the sharp increase in global inflationary pressures.