Over the last week, we saw Sterling continue its outperformance, seeing it rise to 1.15 against the Euro and 1.40 against the U.S Dollar. The main reason for this is still the strong vaccination effort in the UK and the implication that the UK may see restrictions loosen over the coming weeks. Cases in the UK, albeit they are still quite high, are dropping off significantly (Just goes to show how high they got in December/January) and the same with deaths- so though I do not believe NOW is the time to loosen things as this lockdown as evidently worked, I think the time will come soon.
Looking at some data from Israel, it is now proven that the Covid Vaccine stopped 89.4% of transmission there- which is the first global sign that immunization will curb the spread of Coronavirus- which is truly great news and the light at the end of the tunnel is definitely getting brighter.
Back to Sterling exchange rates- the main reason we saw a boost of strength on Friday was in anticipation of PM Boris Johnson’s speech on Monday where he is expected to map out a plan for the UK to exit lockdown for the last time. I do now think that confirmation of the UK coming out of lockdown before April will be a strong boost for Sterling and we can easily see Pound to Euro exchange rates rise to 1.16/1.17 over the coming weeks, and eventually, a return to 1.20 and Pound to Dollar exchange rates rise to 1.42/1.43 in the near-term.
At this point I do not have much else to write until we have heard from the PM, Vaccines worldwide seem to be getting stronger, which is pointing to the pandemic ending globally in time- which is welcome news to us all I am sure. Let us see how this week goes, if you are currently working on a situation and would like assistance with please don’t hesitate to contact me.