16/02/2021

Positive vaccine sentiment lifts Sterling


GBP

Sterling posted fresh highs against both the euro and dollar yesterday as positive vaccine sentiment and optimism for an end to the third national lockdown helped boost the pound.

The move higher which saw GBP-USD trading at 34 month highs and GBP-EUR at 9 month highs follows comments over the weekend from British Prime Minister Boris Johnson that the U.K. had reached a significant milestone in the fight against Covid-19 with official data showing 15 million first doses of the Covid vaccine had been delivered, fuelling calls for the government to start relaxing the lockdown measures.

The Covid Recovery Group (CRG) who are made up of conservative backbenchers are among those calling for the Prime Minister to commit to a timetable on exiting lockdown. In a letter sent to the British Prime Minister, the CRG acknowledged the “tremendous pace” of the vaccination rollout and argued that there will be no justification for restrictions to remain in place once the over 50 group have been vaccinated by the end of April. The letter also called for schools to return in early March with pubs to re-open in early April “in a commercially viable manner”. So far the letter is said to have gained the support of more than 60 Conservative backbenchers.

The U.K. government also announced a new hotel quarantine system in an attempt to stop variants of the Coronavirus spreading in the U.K. The new rules require passengers arriving from 33 red list countries to spend 14 days in a hotel room.

Adding to this, House prices in the U.K. recorded a surprise jump after three consecutive months of falls according to Right Move.

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