Market sentiment shifts in favor of UK's vaccination efforts; markets focus on upcoming US data.
The pound sterling struck a near 3-year peak versus the US dollar and was also moving toward an 8-month high versus the euro during London trade. Analysts generally concur that the UK's bold program to vaccinate Britons against the coronavirus have shifted sentiment, especially given the swiftness of the roll-out relative to the Eurozone. On Tuesday, a government official announced a testing regimen for all individuals who have traveled to the UK; travelers to Britain are already required to self-quarantine. The idea is to ensure that any potential new strain of the virus can be better contained with a period of self-isolation. Data have shown that speculators continue to believe the pound will appreciate in the short time, especially against the euro.
In London trading as of 10:58 am, the EUR/GBP was trading at 0.8790 pence, a gain of 0.2556%; the pair has ranged from a low of 0.87604 pence to a high of 0.87980 pence. The GBP/USD was higher at $1.3767, up 0.23%, off the session peak of $1.37901, while the low was recorded at $1.37319.
Markets to Focus on US Data
With a relatively quiet day on the economic calendar, markets may focus on tomorrow's release of inflation data from the US. The US Department of Labor Statistics will be releasing inflation data; January's Core CPI, which excludes food and fuel prices, is expected to fall to 1.5% on an annualized basis, but rise to 0.2% on a monthly basis. Price stability is one of the two mandates of the Federal Reserve Bank, the other being full employment. To that end, data on unemployment claims will be released on Wednesday, with analysts calling for a slight decline in the weekly figures for both initial and continuing claims for benefits.