- GBP benefits from dollar weakness.
- Vaccine rollout lifts sentiments.
- US stimulus developments eyed
British Pound benefitted along with other major currencies as dollar selling intensified. Market participants expect the central banks to continue to inject liquidity into the banking system and the coronavirus vaccine rollout portrays the pandemic as less risky than earlier.
Analysts expect the liquidity and vaccine to trigger an economic recovery in 2021.
The commodities like oil and risk-sensitive currencies including EUR, GBP and AUD benefitted from the positive sentiments while sidestepping the paycheck’s hike delayed by the US Senate majority leader as well as the spread of mutated coronavirus.
Today the UK Parliament will approve the post-Brexit trade deal with the EU, after a day-long discussion. GBP/USD will positively respond to this event along with the news of AstraZeneca/Oxford University vaccine approval and might help the pair to scale back to its recent highs above 1.36.
GBP/USD touched 1.3620 on December 17 and the Christmas eve, benefitting from the US dollar’s weakness.
Meanwhile, the UK economy received positive news on Wednesday – Nationwide house price index showed annual house price growth rising to a six-year high of 7.3 Percent in December. The housing price optimism and the Brexit deal’s upcoming approval by the UK Parliament will set the stage for a further rally in the GBP/USD.
At the time of writing, one British Pound buys 1.3591 US dollars, up 0.69% as of 02:19 PM UTC.