Pound sterling in touching distance of $1.40 as currencies enter ‘post-Covid world’
Pound sterling is a whisker away from $1.40, today hitting $1.376 and up 0.86 per cent on the day.
The US dollar wasn’t helped either, with some unexpectly poor data on new weekly jobless claims this afternoon.
Britain reported this week that it has vaccinated more than 17m people with a first dose against Covid-19 so far — the fastest rollout per capita of any large country.
Neil Jones, head of FX sales at Mizuho Bank, said sterling is benefiting from the fact that the currency market is already looking at a “post-covid world.”
“The pound is benefiting from its vaccine currency status. Expectations for a more rapid economic recovery are kicking into play.”
ThinkMarkets Fawad Razaqzada said that the rate is ‘too close’ for the GBP/USD not to hit the 1.40 handle.
With the pound as equally strong as the dollar, Razaqzada added that in the longer term, the picture remains positive for the pound as he estimated the handle could reach in the 1.50s range.
An additional factor responsible for the pound’s strength includes this week’s ‘stronger than expected’ inflation data, which Razaqzada has said is down to rising price levels, making it less likely for the Bank of England to introduce negative interest rates.