IFX Market Report: Monday 1st February 2021

As markets anticipate the upcoming Bank of England interest rate decision, the Pound is strong as we enter this week’s open; trading above 1.37 against the U.S. Dollar and above 1.13 against the Euro. The Pounds strength is due to broader market sentiment and positivity surrounding the UK’s vaccination programme. Looking ahead to Thursday, any moves on interest rates or the QE programme would likely lead to volatility in the Pound. With this said, the consensus is that the BoE will leave rates unchanged. A poll by Reuters earlier this month showed that 54 out of 57 economists forecast the BoE will leave rates unchanged at 0.1%.

After taking a knock on Thursday, GBP was able to bounce back on Friday, regaining its status in the 1.37 range. GBPUSD started the day off slow at 1.3675 but quickly advanced in the session and was able to close at 1.3722.

GBPEUR also managed to gain some upside on Friday. Despite starting the day at 1.1295 the pair was able to break through the 1.13 barrier and close at 1.1307.

Friday was also a positive day for EURUSD. The pair opened the session at 1.2106 and bettered that by the close, finishing at 1.2135.

As noted earlier, the UK’s impressive roll out of the COVID-19 vaccine is continuing to support GBP. The UK broke another record yesterday with 1.1M vaccinations in 24 hours – taking the total number of people to 9,468,382. Health Secretary Matt Hancock said yesterday that he was “very, very grateful to everybody involved…. It means that three-quarters of those over the age of 75 but under 80 and four-fifths of those over 80 have now been jabbed”. The UK is third in the world for the number of vaccines administered, with only the US and China ahead. According to Our World In Data, the US has administered 29.58M doses, while China has given 22.77M jabs. In terms of ratios, Israel still leads the way in number of vaccine doses per 100 people. Data shows that Israel averages at 2, followed by the United Arab Emirates, Serbia and the UK, on 0.99, 0.65 and 0.53 respectively.

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