IFX Market Report: Monday 15th February 2021

After a strong finish last week, the Pound has recorded a fresh high against both the Dollar and Euro this morning. The determining factors of the Pound’s strength continues to be rising global stock markets and the expectation the UK is on the verge of a vaccine lead economic recovery. The government have announced that they have reached their target of giving the first jab to over 15M people, and the UK is now entering the next phase of its vaccination programme. Prime Minister Johnson described the roll out as an “extraordinary feat” and said the country can move forward into the next stage of the programme “with great confidence”.

After losing a bit of momentum on Thursday, GBPUSD made a strong recovery on Friday to reclaim its status in the 1.38 range. Opening at 1.3793 cable quickly went on to surpass the 1.38 handle and close the day finally at 1.3855. It is important to note that the rate has advanced dramatically this morning – with GBPUSD reaching levels not hit since April 2018.

GBPEUR also was able to gain some upside in Fridays session. The pair started at 1.1391 and managed to close the day at 1.1425. This morning the pair has gone on to 9-month highs as the Pound continues to gain strength.

EURUSD had a relatively quiet session on Friday. The pair opened the day at 1.2109 and closed the week just above that mark at 1.2126.

The main driver of Sterling’s strength is the UK’s vaccination programme. In total, more than 15M people in the UK have had their first dose of the vaccine. After the success of the first phase, the government are now offering jabs to those aged 65 and over and younger people in the at-risk groups. There is an estimated 7.3M people aged 16 to 65 with a range of health conditions that puts them at high risk from the virus. Once this latest stage of the programme is done, the roll out will then be extended to the remaining over-50 age groups, with the aim of offering a first dose to another 17.2M people before the end of April.

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