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GBP/USD rallies towards 1.38

GBP - British Pound

The pound has pushed higher versus the US dollar over the past 24 hours as sterling benefits from the UK's rapid Covid-19 vaccination programme and the threat of negative interest rates being implemented by the Bank of England recedes. Latest figures show that over 12 million people have now had at least one Covid-19 jab with the government well on its target to have vaccinated 15m people by Monday 15th Feb. Thankfully the snowy weather has caused only minor disruption in the east of England and Scotland so the pace of vaccinations continues to ramp up meaning we could well exceed 15m come the end of the weekend. At a press conference last night at 10 Downing St, Health Secretary Matt Hancock urged all over 70's who had not received an invitation to get a jab to contact the NHS about booking an appointment. Key indicators such as the number of deaths, new infections, and hospitalisations are all now trending lower, however the workload on the NHS is still extreme and we should expect restrictions to be in place for several more weeks.

Data-wise it’s another quiet day from the UK with tomorrows speech by Bank of England Governor Andrew Bailey at the annual Mansion House dinner the upcoming event of note for pound traders.

GBP/USD has been aided by some broad dollar weakness overnight and is pushing up towards the 1.38 handle, it currently sits around 1.3770. GBP/EUR however has slipped a touch and is back under 1.14, the main driver for this has again been dollar weakness with EUR/USD recouping some of the losses it has seen over the past couple of weeks.

Key Movers

After briefly dipping below 1.20 towards the end of last week the euro has regained some of its poise with EUR/USD now back up around the 1.21 handle. Whether this is a temporary correction before more losses are realised is yet to be seen. Democrats are pushing ahead with Joe Bidens huge $1.9t stimulus package which if passed could drive the US dollar higher if it leads to more consumer spending in the States. Americas vaccine programme is also way ahead of the EU's so if this continues then it’s likely we could see EUR/USD falling back to the 1.20 handle before too long.

In the absence of any top tier data coronavirus developments and commentary about it will be the main drivers over the next 24 hours. Tomorrow sees US inflation figures released at lunchtime ahead of a speech by Fed Chairman Jerome Powell hosted by the Economic Club of New York.

EUR/USD trades at 1.2105 with USD/JPY at 104.60 reflecting the softer dollar theme.

Expected Ranges

GBP/USD: 1.3680 - 1.38 ▲

GBP/EUR: 1.1320 - 1.1440 ▼

GBP/AUD: 1.7730 - 1.79 ▼

GBP/NZD: 1.8930 - 1.91 ▼

GBP/CAD: 1.7480 - 1.7610 ▼