Home Daily Commentaries Vaccine concerns weigh on the pound

Vaccine concerns weigh on the pound

Daily Currency Update

GBP - British PoundSterling performed poorly again yesterday, dropping back below 1.38 against the US dollar. It had been trading above $1.39 towards the start of the week and hit a low around the $1.37 handle. This equates to nearly a 1.5% drop in just a few short days. GBPEUR is in a similar trading pattern this week, with that trading from highs of around €1.18, all the way down to the mid €1.15s.A key driver for this move has been investors' doubts around the UK’s vaccine rollout causing a sell off in Sterling. The UK is quite heavily dependant on the AstraZeneca vaccine. There are now question marks around it’s link to blood clots.

Key Movers

Over in the US all eyes were on the Federal Reserve last night as last month’s FOMC minutes were released. The minutes confirmed the Fed's message that there will be no imminent change to stimulus and it will likely be ‘some time’ until substantial change. It is worth noting that the Fed has shifted its focus towards ‘observed outcomes’ rather than forecasts which will afford them more leniency down the line as well.The ECB minutes are released at 12.30 today and Fed Chair Jerome Powell is speaking at the IMF summit. Also on the docket are Bullard, Kashkari and Haldane so lots of central bank chatter.

Expected Ranges

  • GBP/USD: 1.3695 - 1.3790 ▼
  • GBP/EUR: 1.1505 - 1.1610 ▼
  • GBP/AUD: 1.7905 - 1.8075 ▼
  • EUR/USD: 1.1820 - 1.1950 ▼