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Reuters has reported that, in a Channel 4 News, the Bank of England Chief Economist Andy Haldane has said that news of a possible vaccine for COVID-19 could be transformational for the economy which has been stuck in a “gloom-loop”.

Key comments

“This could be transformational,”

“We’ve been … for so many months in this gloom-loop, right? The media coverage dominated by news of viruses and deaths and destruction of jobs and incomes. All of a sudden, at a stroke … some light appeared at the end of the tunnel.”

Market implications

The pound can find some solace in such words, which have rhymed with those that he made on Monday about the potential for the vaccine to give a confidence boost to the economy. 

Cable struggles to make fresh ground on the upside as the US dollar firms on the prospects of a GOP Senate:

As illustrated above, the DXY has reached a 38.2% Fibonacci level at the structure. 

If this holds as a resistant level, then the pound could continue its advance, although how far it can travel will depend on Brexit progress and containing the coronavirus.