- GBP/USD remains pressured for third consecutive day, fades pullback from 1.3538 recently.
- Jump in UK’s covid cases, hospitalizations attack PM Boris Johnson’s promise of vaccine near 10 miles from home.
- Pfizer-BioNTech vaccine claims effectiveness against COVID-19 strains, US President Trump concedes defeat after broad criticism over Capitol Hill issue.
- US NFP, UK PM Johnson’s daily update, virus numbers and stimulus headlines will be the key to watch.
GBP/USD eases to 1.3557, down 0.08% intraday, while heading into the London open on Friday. The cable drops for the third day in a row even as UK PM Boris Johnson cheered vaccine hopes. The quote’s weakness also ignores upbeat market sentiment amid hopes of the US coronavirus (COVID-19) stimulus. The reason could be traced from the jump in the virus numbers and economic fears at a time when the Brexit deal failed to please Britons. Although the US Nonfarm Payrolls (NFP) will be important for the day, major attention will be given to the UK PM Johnson’s daily vaccine update and US stimulus headlines for fresh impulse.
Early Friday, Sky News quoted Chief Executive of the National Health Services (NHS) England while saying, “Claims that hospitals are not under pressure from surging numbers of people suffering badly with coronavirus are a lie.” The news also mentioned, “Sir Simon had earlier outlined the current challenges facing the NHS in England, describing how there are now 50% more coronavirus patients in hospitals now than during the peak of the first wave of infections last April.”
To combat the pessimism, UK PM Johnson said to have delivered almost 1.5 million vaccine jabs during the first day. The Tory leader also stated, “If all goes well, these together should have the capacity to deliver hundreds of thousands of vaccines per day by 15 January.
Also playing negatively for the sterling is a nightmare that British Truckers are facing due to the Brexit deal and red-tape, per Bloomberg. Further, Daily Mail highlights pessimism among the British companies due to the Brexit deal while saying, “British companies give up on cross-Channel trade because of Brexit red tape.
Alternatively, US President Donald Trump’s public acceptance of defeat and a likely impeachment eases the Democratic Party’s road to more stimulus after winning the Senate. Also favoring the mood could be the headlines from the market leader COVID-19 vaccine developer, Pfizer-BioNTech, suggesting their drug can tame recently found variants of the virus in the UK and South Africa.
Amid these plays, stock futures from the US and the UK print mild gains while the US 10-year treasury yields jump to 2017 levels.
Moving on, GBP/USD traders will wait for UK PM Johnson’s comments on virus and vaccine while also waiting for the US employment data for December. Although virus woes and disappointment from Brexit pressure the cable, overall optimism in the market may recall the buyers.
Read: Nonfarm Payrolls Preview: Long path to recover to be even longer
Technical analysis
21-day SMA support of 1.3513 becomes imminent as the weekly falling trend line, at 1.3645 now, directs GBP/USD to the south.
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