The British Pound has reached 9-week highs against both the Euro and U.S. Dollar as markets push back the expectations of the Bank of England cutting interest rates to negative territory. This news, coupled with the breakthrough of a new Pfizer vaccine and hopes of post-Brexit deal looking increasingly likely, has enabled Sterling to reach the 1.12 range against the single-currency and above 1.3250 against the greenback.
Cable started the session comfortably yesterday opening at 1.3214. The pair continued the rise throughout the day as the Pound focused on positive sentiment surround Brexit and a possible vaccine, and ignored the record surge in redundancies as the UK unemployment rate reached 4.8%. GBPUSD finally closed the session above the open at 1.3232 and has peaked beyond that level this morning, briefly surpassing the 1.33 level at 09:32 GMT.
Tuesday also proved to be a momentous day for GBPEUR as the pair secured itself in the 1.12 range. As markets become progressively hopeful of an trade agreement between the UK and EU, the pair opened the day at 1.1165 and continued to spike during a rollercoaster session, finally closing off at 1.1205.
After a damning defeat in the House of Lords on Monday that saw the House vote overwhelming against the government’s Internal Market Bill, the PM has vowed to push ahead with the Bill regardless. A government spokesperson claimed that the government were “disappointed that the House of Lords has voted to remove clauses from the UK Internal Market Bill, which was backed in the House of Commons by 340 votes to 256 and delivers on a clear Conservative manifesto commitment”. They went on to add that they “will re-table these clauses when the Bill returns to the Commons”. The spokesperson concluded that the government has “been consistently clear that the clauses represent a legal safety net to protect the integrity of the UK's internal market and the huge gains of the peace process.”
After dropping back into the 1.17’s yesterday, EURUSD was able to claw back its losses and climb back into the 1.18 range before Tuesday’s close. The pair opened the session yesterday at 1.1834 and despite losing its grip on that handle early on, the pair saw subtle gains and was able to close at 1.1809.
On the data front, we have little in the form of economic releases today. However, at 13:00 we have ECB President Christine Lagarde speaking, followed by Vice President Luis de Guindos.