Sterling Gains Momentum on Recovery Hopes

Barbara Zigah

Vaccinations and BoE remarks push the pound higher; US dollar supported by stimulus expectations.

Coronavirus EnglandThe pound sterling gained some momentum during London trading on Thursday on hopes that the economy will see a quicker recovery. That sentiment is based on the government's rapid response to vaccinations for its citizens in a wide-spread effort to slow the coronavirus transmission rates. The fact that the Bank of England's chief, Andrew Bailey, also dampened enthusiasm for a negative rate environment is also supporting the pound; markets don't believe the issue will be re-addressed until at least June, a full month later than previous expectations.

As of 11:26 am in London, the EUR/GBP was trading at 0.8906 pence, a loss of 0.0426%; the pair has ranged from a trough of 0.88864 pence to a high of 0.89226 pence. The GBP/USD was higher at $1.3651, a gain of 0.0513%, off the session peak of $1.36814, while the low was recorded at $1.36156. The GBP/JPY was also higher at 141.885 yen, a gain of 0.1341%.

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Dollar Supported by Stimulus Expectations

In the US, the greenback is still gaining support from growing expectations that the Biden administration will provide extensive stimulus packages to industries and individuals hit hard by the impacts of the coronavirus. Recently, Congress approved a much smaller stimulus package for individuals than President Trump had wanted, and there is discussion that Joe Biden will push for the initial $2,000 per person amount. There are also some discussions about regular provisions for stimulus afterward, much as other countries are doing for their citizens; there is already push back from the GOP. The EUR/USD was trading at $1.2155, down 0.055%; the pair has ranged from a low of $1.21355 to a peak of $1.21725.

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.

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