Daily Currency Update

Get access to our expert daily market analyses and discover how your currency has been tracking with our exchange rate tools.

Democrats push ahead with stimulus plan as jobs data misses target

GBP - British pound

Sterling is holding steady this morning maintaining gains it saw on Thursday on the back of the Governor of the Bank of England, Andrew Bailey seemingly putting to bed the idea that negative interest rates could be implemented later this year. Although still in the toolbox, it seems unlikely the bank will utilise them given the upbeat appraisal of the UK's Covid-19 vaccination programme from the governor who expects a strong economic rebound in the UK from the spring onwards. The pound appears to have shrugged off negative news re: the effectiveness of the Oxford Astra-Zeneca vaccine in fighting the South African variant of the virus which was reported over the weekend. A study involving around 2000 people with an average age of 31 showed a large number still got mild symptoms of Covid-19 however it did still prevent against severe symptoms. It should be noted that the trial involved a relatively small number of people and the data is still being analysed however it has been enough for the South African government to cancel its planned rollout of the vaccine which was scheduled to start next week.

Looking ahead, this week will be dominated by Coronavirus developments however there are a couple of noteworthy events to look out for. Wednesday sees Andrew Bailey give a speech at the annual Mansion House dinner (presumably via video conference). We also have the first estimate of 2020 fourth quarter GDP released on Friday morning with 0.5% expansion predicted. GBP/USD sits at 1.3720 with GBP/EUR at 1.14.

Key Movers

Fridays main event was the monthly jobs report from the States which missed target for January. The headline Non-Farm Payrolls number printed 49k when a figure around 85k has been eyed. Also, the previous months fall was revised lower to -227k from -140k which lead to a sell off of the dollar. EUR/USD had finally managed to break below 1.20 earlier in the week on the back of the lacklustre performance of EU countries vaccination programme's however the poor data was enough to push the pair back above the big number as markets took stock of the toll the pandemic has had on the American economy and the time it will take to heal. As a result the Democrat party are pushing ahead with its planned $1.9t stimulus package and will be looking to pass it into law in the next couple of weeks without the need for Republican votes. Although president Joe Biden wanted bipartisan support for the bill, Democrats don't need support from the Grand Old Party as they control both the House and the Senate so it seems the US economy is set for another huge support package by month end which is likely the main reason stock markets around the world are all higher and commodity currencies are on the front foot too.

It is a very quiet week data-wise from the Eurozone so expect Coronavirus news and vaccine developments on the continent to be the main driver for the shared currency. EUR/USD trades at 1.2030 and USD/JPY is at 105.60

Expected Ranges

GBP/USD: 1.3650 - 1.3760 ▲

GBP/EUR: 1.1340 - 1.1445 ▼

GBP/AUD: 1,.7830 - 1.80 ▼

GBP/NZD: 1.90 - 1.9165 ▼

GBP/CAD: 1.7470 - 1.7570 ▼