Sterling Strikes Key Level as Optimism Grows

Barbara Zigah

Market hopes that the UK's third lockdown will soon end have helped push the GBP/USD pair above the $1.39 level, the first such occurrence in almost three years.

GBPMarket hopes that the UK's third lockdown will soon end have helped push the GBP/USD pair above the $1.39 level, the first such occurrence in almost three years. Currency strategists point out that a broadly weaker US dollar is also providing impetus for the pound's appreciation. The UK government's aggressive efforts toward widespread vaccination has raised market hopes of a quicker economic recovery, at least compared to European rivals. It is said that the prime minister will gauge the effectiveness of the immunization program and the lockdown efforts and make a decision as to how soon the restrictions can be lifted. Some analysts believe that the government is likely to push for schools to reopen in early March, likely around the 8th, as the first step in normalization.

In London trading as of 9:41 am, the GBP/USD was trading higher at $1.3896, sliding away from the session peak of $1.39151; the low was recorded at $1.38365. The EUR/GBP was lower at 0.8736 pence, down 0.1577%; the pair has ranged from 0.87234 pence to 0.87622 pence. The GBP/JPY was higher at 146.3910 yen, a gain of 0.701%, off the session high of 146.441 yen.

Euro Data to Drive Sentiment

With Asian markets generally closed for the continuation of the Lunar New Year celebration, and US financial markets closed for President's Day, attention will be focused on whatever data comes out of the Eurozone. Later today, Eurostat is due to release information on December's industrial production figures; analysts polled expect to see a decline in the numbers to -0.6% on a month-on-month basis, down from the previous 2.5% reading. On a year-on-year basis, there could be some improvement to -0.1% from the previous reading of -0.6%. Preliminary GDP data for the Eurozone is due out tomorrow; analysts are predicting that seasonally adjusted GDP will likely be flat, both on an annualized basis as well as a quarterly basis. Currently, the EUR/USD is trading at $1.214, a gain of 0.1749%.

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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