Can Sterling Break the $1.40 Handle
Tuesday 16 February, 2021
Daily Currency UpdateGBP - British PoundSterling rallied again yesterday, as GBPUSD pushed back towards $1.40 handle and GBPEUR traded comfortably above the €1.15 handle. This is actually the highest level Sterling has traded against the Euro in over a year. This move is expected to continue as investors bet on the UK unlocking its economy far sooner than the Eurozone and US as the pace of the UK vaccinations continues. The next hurdle for this uptrend to overcome will be today’s retail sales, manufacturing PMI and Services PMI from the UK. If we see a positive result from today’s raft of UK data, it could be the catalyst to break that key psychological level of $1.40. However, if the numbers disappoint we could see a retracement from these highs in Sterling. In the political world, Keir Starmer has laid out a four-year plan in order to win voters back from the current Conservative government led by Boris Johnson. He made a clear break away from the failed Corbyn Labour party, stating they were under new management.
Key MoversAfter a sharp sell-off in EURUSD on Wednesday, the pair recovered slightly yesterday heading back towards the $1.21 handle. The uptick we saw in the Dollar, following on from the impressive US retail sales figures was short lived. The sell off in the Dollar was supported by the Philadelphia Fed manufacturing index, which beat expectations, however activity slowed from the previous month.All eyes are now on the Eurozone PMIs, we expect disappointing numbers due to limited activity caused by ongoing lockdowns.
- GBP/USD: 1.3930 - 1.4020 ▲
- GBP/EUR: 1.1495 - 1.1590 ▲
- GBP/AUD: 1.7870 - 1.7950 ▲
- EUR/USD: 1.2075 - 1.2155 ▲