GBP/USD: Boris easing restrictions would let the pound to walk up

GBP/USD has bounced from the lows amid vaccine hopes but dropped amid a souring mood and negative rate talks. With economic indicators taking a pause, the importance of COVID-19 statistics and reopening questions will likely increase, according to FXStreet’s analyst Yohay Elam.

Key quotes

“Loosening decisions depend on coronavirus statistics – which have been trending down – yet at a stubbornly slow rate. Therefore, the daily updates may have a growing impact on the pound. Significant easing of the shuttering has room to boost sterling and baby steps to keep it under pressure.”

“Speculation about negative rates is likely to remain rife, yet Brexit may overtake it. If Britain insists on refusing to lengthen the implementation phase, it will revert to WTO terms in 2021, an unfavorable prospect for investors.” 

“COVID-19 cases have been gradually declining in America, as all 50 states have taken steps to return to normal. Both trends are positive for markets and adverse to the greenback. The mood may change if infections and deaths begin rising and if some authorities reimpose restrictions.”

“The US GDP for the first quarter stands out on Thursday. Economists expect the annualized plunge of 4.8% to be confirmed, owing mostly to a sharp decline in consumption.”