The sterling inched a bit higher on Tuesday versus the US dollar and the Euro. This was due to PM Boris Johnson making an announcement that the UK will try to follow a detailed plan for easing the lockdown. In the meantime, UK’s finance minister Rishi Sunak said additional job support would be revealed soon.
The pound rose by nearly three percent this week versus the US dollar, thanks to traders expecting the UK’s fast vaccine rollout will aid their economic recovery from the largest contraction in the past three hundred years.
The PM laid out a detailed plan on Monday for ending the pandemic lockdown, with educational facilities returning on March 8, when only minimal socializing outside would be permitted.
This roadmap is expected to have 4 phases. The last one is planned for June 21 at the earliest, and we will see most of the restrictions abolished.
In early London trade, the pound climbed to USD 1,4098 against the US dollar, its biggest level since April 2018. It was up by 0.2 percent at $1.4089 at 09:56 GMT.
The GBP also climbed 0.3 percent against the Euro at 86.21 pence, the largest level since March last year – a year when many turned towards cryptos as an alternative.
The pound carried on its strong trade on the vaccine label and the linked easing of lockdown measures with expected economic recovery.
The finance minister told the press that more information on job support is coming in the next budget plan, following the reveal that unemployment numbers got to their biggest levels since 2016. It’s clear that the PM’s extended plan put more pressure on the chancellor and the budget reveal. The support and aid for employed citizens will have to go beyond the current April end date.
Even though cable seems overbought at the moment, one can anticipate a test of $1.4095-$1.4100, and above there, $1.4145-$1.4155.