GBP/USD: Firmer around 1.3900 after hopes of UK’s easy lockdown refreshed 34-month top
- GBP/USD remains positive near the multi-month top flashed earlier in Asia.
- UK PM Johnson sounds optimistic as Britain achieved 15 million vaccination target.
- British Foreign Minister Dominic Raab isn’t joining the chorus of diplomats eyeing March 08 move.
- Brexit updates, phase two of UK’s vaccinations eyed amid off in the US, light calendar.
GBP/USD bulls attack 1.3900, after refreshing the multi-month high with 1.3902 figures, while heading into the London open on Monday. The cable stays well bid as successful coronavirus (COVID-19) vaccinations tease the easing of the virus-led lockdowns in the UK. Also on the positive side is the US dollar weakness and easing tension over Northern Irelan (NI) border.
While UK PM Boris Johnson and company cheers achieving Britain covid vaccine target, Foreign Minister Raab said, per Reuters, “We share all of the ambition and the desire to get out of this lockdown, we want to do it responsibly and safely and therefore it’s got to be based on the evidence.” Even so, the UK Telegraph signaled March 08 as the tentative date for rolling back the activity restrictions.
Also on the positive could be the comments from the Irish EU Commissioner Mairead McGuinness. The diplomat said, per Independent, “It was widely acknowledged that the shock move on January 29, which caused an uproar in Dublin, Belfast, and London, was a mistake but it was quickly corrected.” It was further mentioned in the piece that the emergency move to seal the Irish Border to prevent EU-made AstraZeneca Covid-19 vaccines reaching the UK, came about because of a general rush to push that order through.
Over the counter, the US dollar index (DXY) remains depressed around the monthly low, currently down 0.16% near 90.30, as risks remain positive.
The market’s risk-on mood could also be traced from the Asian stocks and S&P 500 Futures as growing vaccinations and nearness to the US covid relief package please the bulls.
On the contrary, chatters that China isn’t cooperating with the World Health Organization’s (WHO) investigation of the virus source and spread joined fresh lockdown in New Zealand to probe the risks. Though, off in China and the US, coupled with an absence of major data/events keep the bulls hopeful.
Considering a lack of major catalysts, GBP/USD bulls can keep the reins while taking intermediate moves over virus, Brexit and stimulus headlines. It should be noted that the recently increasing housing price numbers, due to the expiration of tax relief, can help the Bank of England (BOE) to defend negative rates following the latest upbeat GDP data.
Technical analysis
Unless declining below January’s top near 1.3760-55, GBP/USD bulls can keep the 1.4000 threshold on the table.