Sterling bounces back after recent fall
Monday 29 March, 2021
Daily Currency UpdateEngland takes the next steps in loosening COVID restrictions today, which will see up to 6 people meet outside and outdoor sports resume. Yesterday’s figures showed that the infection rate had fallen to its lowest in 6-months (3.5k) and that there are now 30m people vaccinated. Despite concerns over vaccine supplies from both India and possibly Europe, these have been down played as the US made Moderna vaccine is due to arrive at some point in April to help top up supplies. There are no important economic reports scheduled to be released in the US, UK or Europe today so foreign exchange market traders will be focused on general sentiment and U.S. government bond yields. Sterling has recovered from touching 1.3679 versus the US dollar and 1.1575 against the euro on Friday, partly due to the current handle the UK has on the virus. Data is also thin ahead of the Easter bank holiday weekend, which will see a number of markets closed until Tuesday. GBP/USD has just peered over 1.3800 at time of writing and GBP/EUR has just broken 1.1700.
Key MoversThere are growing concerns that Europe may be seeing a third wave of COVID-19 cases, further delaying the region’s economic recovery. Lockdown measures are due to return in France with partial restrictions due to be imposed on high-infections zones like Paris. German chancellor Angela Merkel has also threatened to invoke federal emergency powers to stop the spread of the disease. At the weekend, France posted its highest number for COVID patients in intensive care units this year, Germany’s 7-day average case numbers hit its highest since January and countries such as Poland, Belgium and the Netherlands all seeing growing cases. This continues to hit the euro which was below 1.1000 against the pound at the end of last year and seen it fall from 1.2325 against the US dollar at the start of this year.
- GBP/USD: 1.3760 - 1.3850 ▲
- GBP/EUR: 1.1670 - 1.1740 ▲
- EUR/USD: 1.1760 - 1.1810 ▼
- GBP/AUD: 1.8000 - 1.8130 ▲