An improvement in market mood meant that the Pound could trend higher on Tuesday, bolstered by the continued success of the UK’s vaccine programme.
While these gains were welcomed, they were tempered by news that the reopening of schools is likely to lead to an increase in cases. There is no notable data released today which means that coronavirus statistics will continue to play a significant role in the direction of the pound. However, at the end of trading, according to the Foreign Exchange Market the Pound finished at 1.1674 against the Euro and 1.3889 against the US Dollar.
It was a slow day for the Euro as the estimated growth in the last quarter of 2020 was downgraded from -0.65 to -0.7%. Despite this, any losses were capped as a result of the negative correlation with the US Dollar. The latest policy meeting of the European Central Bank is also a focus for investors as they move through the week and that could impact the single currency.
Following a sharp pullback in US Treasury yield, the US Dollar found itself on the defensive yesterday. With US Stimulus hopes renewed, demand for the safe-haven currency was limited while the release of the latest US consumer price index will remain in the spotlight today.