The Pound has strengthened against both the Euro and the Dollar. Optimism remains about the UK’s vaccine rollout when compared to other countries. Following several comments from MPC members, negative interest rates look less likely to happen by March which has also given Sterling a boost. Prime Minister Johnson has said that the latest restrictions are starting to have an effect on the transmission rate of the coronavirus in some parts of the country.
The Euro has lost some ground as Germany recorded a new coronavirus mortality record. Europe is under pressure to increase its vaccine rollout as most EU members have administered the vaccine to only 1% of its population. Comments from ECB President Lagarde suggesting that there is less uncertainty after Brexit, vaccines and the US election failed to provide any respite.
The Dollar remains weak with the market waiting in anticipation of President-elect Biden’s fiscal stimulus package announcement which is expected to be worth $2 trillion. However, any potential violence at Biden’s inauguration next week could impact the greenback after Trump was impeached for a second time. Unemployment claims will be released at 1:30pm which will cause some short-term volatility. Federal Reserve Chairman Powell is likely to comment on their asset purchasing programme later today.