24/02/2021

Sterling posts fresh highs against EUR and USD


GBP

Sterling experienced yet another day of forward momentum as fresh highs were posted against both the EUR and USD. The reason for this positivity largely remains the same, case numbers continue to fall as vaccination numbers rise. Yesterday, the UK recorded its lowest daily infections of the year at 8,489, compared to 10,641 the day previous. Furthermore, one in three adults had now received a first dose of a covid-19 vaccine as we approach the 18million mark for total vaccinations. In addition, yesterday’s data releases, again, painted a positive picture for the road to recovery. Claimant count change for January and average earnings for December (including and excluding bonus) all posted better than the expectation, with the unemployment rate meeting expectation.

Sentiment surrounding the British economy has largely improved in 2021. Brexit is somewhat of an afterthought as investors now look to capitalize on the economic recovery towards the later part of this year. Additional near term momentum could also be experienced through the March Budget if Rishi Sunak decides on an expansionary stance. With a roadmap to leave lockdown now set, the end is now in sight. It must be noted, however, any indication to delays in already proposed dates could cause some corrections in the rate in the short term.

Events:

15:00 GMT – Fed Chair Powell Testifies
15:30 GMT – BoE Monetary Policy Report Hearings


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