- Posted by currencies in Bank of England, Brexit, coronavirus, Currency, Dollar, EUR, Fed, GBP, Sterling, UK, Uncategorised
- February 9, 2021
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Sterling hit its highest level against the dollar since April 2018 and traded just below eight-month highs against the euro, with analysts citing Britain’s lead in COVID-19 vaccinations as a positive for the currency.
Analysts have largely been constructive on the pound – particularly against the euro – this year, noting that Britain’s COVID-19 vaccine rollout has been swifter in comparison to Europe.
Helping the pound broadly has also been the Bank of England, which at its meeting last week pushed back at market expectations of negative interest rates. Money markets do not reflect negative rates from the Bank at least as far out as August 2022.
Britain is looking at greater testing of all people who have arrived from abroad while they are self-isolating to defend against new variants of the virus that causes COVID-19, a minister said on Tuesday.
Speculators increased their net long positions on the pound – bets that it will strengthen – in the week up to February 2.
The US dollar is on the back foot again today as investors continue to push risk markets higher ahead of the proposed USD1.9 trillion US stimulus plan.
The main US indices continue to print fresh highs, while European bourses play catch-up due to a lagging covid-19 vaccination program. Last week’s US non-farm payroll print was weaker-than-expected and further fuelled belief that the Fed will continue to keep monetary policy looser-for-longer until the employment market rebounds to near pre-pandemic levels.