Home Daily Commentaries Sterling higher as vaccine rollout ramps up

Sterling higher as vaccine rollout ramps up

Daily Currency Update

GBP - British PoundSterling has started February on the front foot with the pound benefiting from yet more positive Covid-19 vaccine news over the weekend. The UK announced just under 600k had received their first jab on Saturday a new daily record which puts the government on course to achieve its target of 15m people from the most vulnerable parts of society getting their first injection by February 15th. More than 8m people have had their first vaccination now which equates to about 14% of the population. This places the UK ahead of the US which has administered a vaccine to about 9.5% of its population and way ahead of EU countries such Germany, Italy and France none of which has yet to reach 4%. With Boris Johnson tentatively outlining that schools reopen from 8th March it seems we should hear more and more as we go through February as to when other parts of the economy can reopen as members of parliament, especially within the Tory party look for a road map to when businesses can reopen and hopefully things can return to something resembling normality. Looking ahead Thursday sees the Bank of England's first interest rate decision of 2021 with no change on policy expected. The main talking point will be any discussion of the bank imposing negative rates. Cold water appeared to be poured on the idea by BoE Governor Andrew Bailey last month and those betting on a sterling rally will be hoping that the encouraging news re: the vaccination programme puts the idea to bed once and for all. GBP/USD and GBP/EUR are both higher at 1.3720 and 1.1345 respectively.

Key Movers

Stock markets have risen this morning as last weeks jitters on the back of trade-via -app retail investors co-ordinated buying of stocks start to wane. Many hedge funds were caught out when stocks such as Gamestop Corp surged causing them to haemorrhage cash to cover their short positions in the US high street chain that sells computer games. It appears that retail investors have turned their attention to silver this morning with the commodity rising 10% and hitting prices not seen since 2013. Given the market for silver is huge the rally is much more muted compared to seen in certain equities last week. Positive manufacturing news out of China has also given stock markets around the world an upward lift. The row between the European Union and AstraZeneca over its Covid-19 vaccination allocation also seems to have cooled somewhat with the British/Swedish pharmaceutical giant promising the bloc an additional nine million doses by March. This will bring the amount allocated by AZ to the EU to around 40m if it comes through, although this is still well short of the 80m the EU had been expecting. Things temporarily came to a head on Friday when the EU threatened to stop the export of vaccines to the UK however it quickly backtracked amid huge furore when it emerged that Irish PM Michael Martin hadn't even been notified of its intention to do so.Data-wise it’s a relatively quiet start to the day, the US ISM Manufacturing PMI is the only top tier data of note with a very healthy 60.0 eyed. The main event this week will be Friday’s US jobs report with the headline Non-Farm Payrolls predicted to show 55k added to the labour force in Jan. EUR/USD has slipped to around 1.21 as the EU's poor performance re: coronavirus immunisation weighs on the shared currency.

Expected Ranges

  • GBP/USD: 1.3660 - 1.3760 ▲
  • GBP/EUR: 1.1270 - 1.14 ▲
  • GBP/AUD: 1.79 - 1.8065 ▲
  • GBP/NZD: 1.9050 - 1.92 ▲
  • GBP/CAD: 1.75 - 1.7640 ▲