Vaccine rollout continues to push Sterling higher


Sterling continues to strengthen as the impressive vaccine rollout edges the pound higher against major currencies. The pound hit a 9 month high against the Euro on Monday and there is growing expectation that the pound could surge further against the Euro and other major currencies. The pound is also being boosted by an increase in global risk appetite and interest rates remaining unchanged for now.

The vaccine rollout means that the U.K. can achieve an economic recovery a lot quicker than expected and with lockdown restrictions set to ease soon, this will be positive for the pound. Reopening of the economy will lead to a pick up in economic growth and will allow the U.K. economy to work towards pre Covid levels. Furthermore the Eurozone is behind the U.K. in its vaccine rollout which implies the easing of restrictions across Europe will also be slower and therefore the economic recovery will be delayed, this could boost the pound further against the Euro in the coming weeks.

Key announcements

7:00 – GBP – CPI Y/Y – 0.7% actual from previous 0.6%
1:30 – USD – Core retail sales m/m – Forecast at 1.1% from previous -1.4%
1:30 – USD – Retail sales m/m – Forecast at 1.1% from previous – 0.7%

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