During trading on Wednesday, the Pound to US Dollar rate nudged lower although the Pound to Euro rate remained steady finishing the day at 1.3866 and 1.1511 respectively, according to the Foreign Exchange Market.
There was further optimism over the easing of lockdown following comments from Boris Johnson despite the outcome of the UK’s consumer price index which showed an acceleration of domestic inflation during January.
It was a defensive day for the Euro as the single currency had to deal with the negative correlation with the US Dollar. Along with this, the increase in concerns around the lack of speed of the vaccination rollout hinted that lockdown restrictions are going to be in place for some time and this remains an ongoing concern for investors. The latest consumer confidence index is released today and could put further pressure on the Euro.
Some positive US data releases bolstered the US Dollar yesterday as US retail and industrial production were better than expected during January. Along with this, there was an increase in US Treasury yields which also provided support. The latest US initial jobless claims are released today and that could make things difficult for the safe-haven currency.