Connect with us

Hi, what are you looking for?


GBP/USD Hits 3-Month High but Return of Brexit Boogeyman Will Cap Gains By

GBP/USD Holds Gains Ahead of BoE Decision, Scottish Election

© Reuters.

By Yasin Ebrahim – The pound soared to a three-month high against the dollar, riding on the coattails of reopening optimism, but the end of pandemic will bring the focus back on the Brexit effects that could halt cable’s run higher, according to an FX expert.

rose 0.39% to $1.4188. 

“Corona euphoria is continuing, but we remain Sterling sceptical,” Commerzbank (DE:) FX, EM Analysts You-Na Park-Heger said in a note. But with the end of the pandemic, market attention “will increasingly focus on the (negative) Brexit effects again, […] we see little scope for further Sterling appreciation,” Heger added.

The success of the vaccine rollout, with about 55% having already received the first dose, keeps the U.K. on track to lift all Covid-19 restrictions in about one month, and has helped strengthened the recovery, particularly in the labor market.

The U.K. reported Wednesday 46,000 job gains in March, taking the total to 102,000 jobs from the trough in January, suggesting the U.K. “may finally be turning a corner with further reopening effects ahead,” Scotiabank said in a note.

The optimism over the reopening has shielded sterling from remarks from Bank of England members, who in recent days have attempted to keep investor expectations grounded.

“Not even comments by Bank of England member Gertjan Vlieghe that the economy still needed a lot of stimulus and that the BoE would add negative interest rates to its toolkit in August was able to affect Sterling,” according to Heger.

The somewhat dovish remarks from Vlieghe arrive just weeks after delivered updated economic projections, forecasting growth of 7.25% this year, the fastest pace in more than 70 years.

The BoE also cut its weekly bond purchases to £3.4 billion from £4.4 billion in order to meet its unchanged £875 billion year-end target.

But the central bank was insisted that the slowing of its weekly bond purchases should not be viewed as a taper given its £875 billion bond holding target remains intact.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like


Cybercriminals Adopt the Blockchain to Broadcast confidential Messages A group of analysts from SophosLabs represents that programmers working the crypto-jacking malware, Glupteba, have been...


PUBG unban in India soon as PUBG Corp. Will The Government Of India Unban PUBG? PUBG Mobile was Ban in India, PUBG organization has...


A standard method to execute Bitcoin could be powerless against double-spending, the new examination has found. Blockchain sleuths at ZenGo, a wallet startup, have...

BlockChain News

HDD mining, also known as “storage mining”, is a process of obtaining cryptocurrency based on hard disk memory. Compared with traditional POW mining, hard...