IFX Market Report: Monday 18th January 2021

The Pound was weaker on Friday, losing over 0.5% against the U.S. Dollar, and recording its first loss in seven days against the Euro. The UK is still struggling with the surge of COVID-19 infections, recording over 55,000 new cases on Friday. In an attempt to bring cases down and stop any “unidentified new strains” from entering the country, the government have implemented new rules closing all UK travel corridors. All travellers to the UK must arrive with a negative COVID-19 test (taken 72 hours before travelling) or face a fine of £500. The government has said the travel corridor closure will be in force until at least 15th February.

GBPUSD opened Friday at 1.3646, and quickly came under considerable selling pressure. As the Pound suffered its worst day of the week, the pair depreciated into the 1.35’s – closing the week at 1.3597.

Although the losses were not as great as against the Dollar, GBPEUR was also down on Friday. The pair started the day at 1.1258 and closed at 1.1240.

After a tough week for EURUSD, the pair fell into the 1.20 range on Friday as Dollar continued to finish the week strong. The pair opened the session at 1.2121 and was unable to resist the Dollars newfound strength, finally closing at 1.2097.

On the vaccine front, people in England aged 70 and over, as well as those listed as clinically extremely vulnerable, will begin receiving offers of a COVID-19 vaccine this week. Boris Johnson stated that this announcement was a “significant milestone” for Britain and wanted to “thank everyone involved in this national effort” that is now seeing the NHS “delivering the vaccine at a rate of 140 jabs a minute”. The PM added that while the UK has “a long way to go… but by working together we are making huge progress in our fight against this virus”. In order to facilitate the government’s target of offering a vaccine to all 15M people in the top four priority groups by 15th February, 10 new vaccination hubs are being opened from Monday.

Foreign Secretary Dominic Raab has commended the government’s latest actions to battle the pandemic, claiming the UK was making “good progress” to ensure every adult has access to a vaccine by September. While concurring with Raab, Health Secretary Matt Hancock pointed out that the focus of the effort is those in care homes, healthcare staff and those aged 80 and over. Mr Hancock said these people “remain our utmost priority over the coming weeks to reach the rest of these groups.”

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