Sterling was able to make modest gains in the Wednesday session and close above the 1.39 handle against the Dollar for the first time this week. GBPEUR once again tested the 1.17 mark but met heavy resistance at 1.1695. Despite these positive moves for the Pound, some bearish economists are betting against GBP as some medical experts believe the UK government will lift restrictions too quickly. What has underpinned Sterling as the top performing G10 currency of 2021 has been the UK’s incredibly efficient COVID-19 vaccine roll out; so naturally, if the country sees a rise in cases when lockdown ends, it will cause critical damage the Pound. The UK’s Chief Medical Advisor Professor Chris Whitty expressed his concerns to MPs earlier this week claims that “under all the scenarios, if we unlock very suddenly, all the modelling suggests we would get a substantial surge while a lot of people are not protected”.
GBPUSD started the day at 1.3868 after suffering minor losses in the Asian session. Cable maintained momentum throughout the day and was able to close at 1.3903.
GBPEUR opened Wednesday at 1.1678 and closed at 1.1687. With no UK data release till Friday, the pair will be looking to today’s ECB Interest Rate decision for direction. The European Central Bank are expected to keep rates on hold, but many are suspecting a change to their Pandemic Emergency Purchase Program (PEPP). If the bank decides to increase near-term purchases it would likely help drive down yields after a recent rise but may consequently lead to Euro weakness.
EURUSD was able to reach the 1.19 mark in the session yesterday but was unable to hold that position. The pair started the day at 1.1877 and closed at 1.1895.
Following the ECB Rate Decision at 12:45, Christine Lagarde will be giving a Press Conference at 13:30. Also at this time, across the pond we have the weekly U.S. jobs report consisting of Continuing Jobless Claims, Initial Jobless Claims and Jobless Claims 4-week Average. With the labour market still a long way from recovery it is unlikely this week’s report will paint a positive picture for the United States.
