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The Pound remains on track to continue its climb higher against The Euro and USD after a relatively well received budget for 2021 as well as the ever-progressing vaccine roll-out. Rishi Sunak’s budget yesterday was labelled a giveaway budget with £65bn being provided as financial support to ensure the post-lockdown recovery is as long-lasting as possible. Increased giveaways include an extra £6bn in business rates relief and £5bn in grants. The hospitality and tourism sector both received an extension of the 5% VAT rate put in place last year to further support these industries whilst The UK comes through a gradual lifting of restrictions.

The other main driving force behind Sterling is the exceptional pace of the vaccine roll-out, with just under 21 million having received at least one dose of the vaccine, working out as nearly a third of the population and is lifting optimism that The UK will be able to stick to Boris Johnson’s roadmap out of lockdown and has even led to calls for those dates to be brought forward if the data supports this.

All eyes for USD will be on Fed Reserve Chairman Jerome Powell’s speech later this evening with this being the last one before the Fed’s policy-making committee come together in Mid-March. Friday sees more jobs data for the U.S. as Non-Farm, Unemployment Rate and average earnings are all set to be released. These data releases are hugely indicative towards the economic performance in The U.S and extremely volatile towards the exchange rates. Recent jobs data coming out of the U.S has been underwhelming. The economic forecast however does look promising with The Fed Reserve tracker expecting the U.S. economy to hit 10% growth for the first quarter of 2021. The main support behind this coming from a surge in personal income with $600 boost checks from the government which in turn has seen an increase in personal spending.

Euro-Zone data this morning has seen Retail Sales for the bloc retract by 5.9% for January against an expectation of 2.5% growth. The reading followed of a slight increase seen in December and much further losses of an initial 1.8% projected. All in all, Retail Sales have fell by 6.4% over the year and the unemployment rate is currently at 8.1% which only gives more traction to the suggestions that countries within the bloc should start to make plans for a gradual easing of lockdown in order to allow the economy to recover. Yesterday saw Angela Merkel initially extend Germany’s lockdown until March 28th but will allow for areas with low infection rates to re-open non-essential retail. The scrutiny on their Covid numbers over the next few weeks will be crucial to what happens in Germany at the end of March but also the rest of Europe.

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