Home Daily Commentaries Sterling continues to rally as first vaccine target reached

Sterling continues to rally as first vaccine target reached

Daily Currency Update

GBP - British PoundSterling ignored disappointing GDP data on Friday and continued to push higher against most major currencies. The GDP numbers showed that the UK economy grew 1% in the fourth quarter, however the year-on-year figures painted a grim picture, contracting 9.9%. This was the most significant decline since records began. Despite this we saw GBPUSD break well over the 1.38 handle and GBPEUR remain above 1.14. The continued optimism around the UK’s vaccine rollout has continued to boost the pound against most of its peers. This combined with Andrew Bailey, the Bank of England’s governor, consistently dismissing the idea of negative interest and providing an upbeat outlook for future economic conditions, has made Sterling the best performing G-10 currency of the year so far. The main focus this week will turn to UK retail sales numbers at 7am on Friday, followed by flash services and manufacturing PMI’s at 9am.

Key Movers

Mario Draghi, the former head of the European Central Bank, has been sworn as Italy’s Prime Minister after putting together a new unity government. The previous government collapsed over the pandemic handling and divergences on how to spend EU recovery funds.Amsterdam surpassed London as Europe’s largest share trading centre last month as the Netherlands scooped up business lost by the UK since Brexit. Daily shares traded on Euronext Amsterdam and other Dutch trading platforms increased more than fourfold since December.The US Senate acquitted former President Donald Trump in his impeachment trial after failing to reach a two-thirds majority. The end of the proceedings clears the way for driving through a larger coronavirus debt package. President Joe Biden is working with moderate Democrats on a bill worth up to $1.9 trillion.

Expected Ranges

  • GBP/USD: 1.3875 - 1.3995 ▲
  • GBP/EUR: 1.1405 - 1.1495 ▲
  • GBP/AUD: 1.7820 - 1.7930 ▲
  • EUR/USD: 1.2095 - 1.2185 ▲