22/02/2021

Sterling remains stable ahead of the UK’s lock-down exit plan


GBP

Today see’s the eagerly anticipated announcement of the UK’s lockdown exit plan, with investors awaiting to see whether the details will be overly cautious or if the economy will reopen in large chunks. This follows on from last week, where the pound was yet again the best performing major, hitting three year highs against its peers. The continued speed of the vaccination rollout was the major source of support for sterling as it continued to add additional gains to its already strong 2021. As of Friday, the UK had met its target and vaccinated a third of its adult population, significantly more than the Eurozone and US. The assumption to this point is that the vaccinations will allow for the domestic economy to be unlocked quicker which will in turn trigger a faster economic recovery and eventual growth.

However, most expect today’s lockdown announcement to lean towards being cautious, and this could end up slowing the recovery and cause the pound to stall. This will disappoint those who are expecting the roadmap to release the shackles from the UK economy with the government expected to focus on suppressing the spread of Covid while vaccines are being rolled out.

Key announcements

14:30- EUR: ECB President Lagarde Speech
19:00- GBP: Boris Johnson Speech


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