Daily Currency Update

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Sterling sits lower overnight

GBP - British Pound

UK headlines helped push the pound to a session high against the EUR and USD yesterday. Boris Johnson signed a cross-border treaty to cooperate with the likes of France, Germany and a number of other countries in tackling the next international health crisis. A post-Brexit treaty is to help solve the COVID riddle and prevent any new strains spreading as they have previously done. The collaboration is also seen as a way UK can ease tensions with its neighbours in Europe.

Boris Johnson also confirmed yesterday that 60m doses of the Novavax vaccine is to be produced and packaged in the UK. Originally the plan was for the vaccine to travel to Sweden for its completion, but the finishing process will now be completed in the UK by GlaxoSmithKline. This change has eradicated concerns of potential EU blocks on the return of the vaccine from Sweden. This vaccine will take the UKs total to four with the Novovax coming at a time to vaccine many younger adults in May/June.

Low impact UK data yesterday saw mortgage approvals fall and net lending to individuals pick up. Both likely had a play on sterling gains yesterday morning as the releases occurred at the same time as the movement. GBP/USD touched 1.3840 at the highs, but we test falling below 1.3750 this morning. GBP/EUR broke 1.1750 and is only slightly lower as I type.

Key Movers

The US vaccination programme is on course to vaccinate 90% of adults by April 19th with a swathe of US pharma companies increasing their output. This is good news for the US economy with Joe Biden due to unveil plans of his next stimulus plan tomorrow. It is expected to concentrate on infrastructure and cost around USD 3t.

Similar to the UK, there has been little US data to consume so far this week. Late this afternoon however, we expect the latest consumer confidence figure but this will likely be overshadowed by the vaccine and stimulus headlines. EUR/USD has fallen consistently since the beginning of the year, taking the currency pair from 1.2325 down to 1.1735 seen this morning. As the US successfully vaccinating against the virus and the EU still playing catch up, EUR will likely lose further ground.

Expected Ranges

GBP/USD: 1.3750 - 1.3840 ▼

GBP/EUR: 1.1680 - 1.1760 ▼

GBP/EUR: 1.1710 - 1.1780 ▼

GBP/AUD: 1.7980 - 1.8090 ▼