- Pound (GBP) trades higher after biggest weekly loss since March
- Oxford University / AstraZeneca vaccine trials restart, boosting risk sentiment
- Safe haven US Dollar trades lower
- Federal Reserve monetary policy announcement in focus later this week
The Pound US Dollar (GBP/USD) exchange rate is off its 7-week low, attempting to rebound on Monday. The pair shed 3.7% across the previous week in its worst weekly performance since early March.
At 06:15 UTC, GBP/USD trades +0.2% at 1.2820, towards the top end of the daily traded range.
Brexit continues to dominate for Pound investors after an eventful end to last week. The government’s plans to undercut the Brexit Divorce Treaty prompted a tough response from the EU. If the British government doesn’t scrap those plans, found in the Internal Markets Bill by the end of the month, trade talks will be cancelled and the EU could start legal action.
Today the bombshell Internal Markets Bill will be debated in Parliament. There are questions surrounding whether the bill will make it through Parliament. However, if it does the Justice Secretary Robert Buckland has already said he will resign given that the bill breaks international law.
Brexit talks last week ended with little progress, with more talks scheduled for this week.
Elsewhere the mood in the market is buoyant, with the providing dome support to the Pound, after Oxford University said that their vaccine trial has restarted after a routine halt last week.
The same vaccine news is dragging on the safe haven US Dollar. The greenback is trading lower versus a basket of currencies as investors look for riskier assets as risk appetite notches up.
This week sees some key data from the US with retail sales and the Federal Reserve monetary policy announcement in focus. The Fed is not expected to adjust monetary policy after announcing last month the shift in policy framework to a average inflation targeting (AIT). This means that the Fed is willing to accept periods of inflation rising above the 2% target, to make up from periods of time below the 2% target.