Pound hits two-month high amid vaccine optimism
[vc_row][vc_column][vc_column_text]The pound strengthened as coronavirus vaccine hopes, Brexit optimism and fading chances of negative interest rates boosted Sterling.
A better-than-expected Eurozone services PMI temporarily helped to lift the mood towards the euro, before a wave of market optimism reversed its gains.
The initial uncertainty over the US presidential election benefitted the safe-haven US dollar last week but USD soon retreated as a ‘Biden bounce’ swept markets after his election victory.
Meanwhile, news of positive progress towards a Covid-19 vaccine saw both the Australian and New Zealand dollars surge across the board.
GBP exchange rates gained in the wake of the latest Bank of England (BoE) policy meeting despite the central bank unexpectedly opting to expand its quantitative easing programme.
Markets were encouraged by policymakers’ decision not to make any fresh mention of the possibility of negative interest rates, leaving the pound with a strong rallying point.
Although UK redundancies rose to a record high in September, helping to push the unemployment rate up from 4.5% to 4.8%, this failed to dent demand for the pound.
With the government set to maintain its furlough scheme until March, fears of a major wave of winter job losses have already shown signs of easing, limiting selling pressure on GBP exchange rates.
In addition, pharmaceutical giant Pfizer’s announcement that its experimental vaccine has shown 90% effectiveness lifted market sentiment and hopes for the UK’s outlook, boosting the pound.
Further gains could be in store for the pound in the days ahead if the third quarter UK GDP strengthens sharply as forecast.
Evidence of a significant rebound in growth during the third quarter could help to limit fears over the economic outlook, even though the odds of a potential double-dip recession remain heightened in the face of the second Covid-19 lockdown.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]
To request an instant quotation on a currency quotation please click here
* Information courtesy of Currencies Direct
Currencies Direct is one of Europe’s leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we’ve maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering “business to business” solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.
[/vc_column_text][/vc_column][/vc_row]
