- GBP/USD rises for the fourth consecutive day, attacks intraday high, after refreshing the multi-year top the previous day.
- Biden’s swearing-in ceremony as the 46th US President lifted the mood, vaccines are also the reason for market optimism.
- UK’s covid-led deaths jump to record to, PM Johnson says figures are appalling.
- Britain’s top scientist Sir Patrick Vallance said UK remains in a very “dangerous situation”.
GBP/USD wavers around the intraday top of 1.3684 while heading into Thursday’s London open. The cable refreshed the highest levels seen since May 2018 after Wednesday’s upbeat British inflation data backed BOE Governor Andrew Bailey’s rejection to negative rates. Also fueling the quote could be the broad US dollar weakness amid market optimism as Joe Biden presides the Oval Office. In doing so, the sterling ignores the coronavirus (COVID-19) woes at home while expecting more positives from the White House and the ECB’s bearish tone.
After the UK’s annualized CPI jumped past market expectations to 0.6% in December, news that Britain marked a gradual reduction in the covid infections favored the GBP/USD bulls to refresh multi-month high. However, the jump in the death toll to the fresh all-time high of 1,820 seemed to be ignored.
Following the covid update, UK PM Johnson said Wednesday’s record deaths from COVID-19 are “appalling” and the death toll is likely to keep rising in the next few weeks because of the spread of a new, more infectious variant of the virus, per Reuters. Also conveying the worries was the UK’s topmost scientist Sir Patrick Vallance. In addition to suggesting virus-led danger for Britain, Mr. Vallance also said, per The Sun, that the pressure on the National Health Services (NHS) is “very, very bad at the moment and in some cases it looks like a war zone in terms of the things that people are having to deal with”.
It should be noted that British singers recently followed business houses while conveying disappointment from the Brexit deal due to travel restrictions. The same could be true for the fisheries.
On the positive side, Oxford scientists are working on the vaccine to combat emerging strains, as per the Telegraph, whereas the World Health Organization (WHO) also pushes for more vaccines, cited by Reuters.
Market’s risk-tone remains upbeat amid hopes of further stimulus and vaccinations as Biden rolls out executive orders. However, fears of escalating US-China tension and challenges for energy companies tame the mood. That said, stock futures in the US and the UK remain upbeat while Asian shares refresh record top by press time.
Looking forward, the British calendar remains empty for the day but the ECB’s monetary policy meeting will be the key for today. Should the bloc’s central bank match wide marked expectations of unveiling a dovish halt, the GBP/USD can witness a pullback.
Read: ECB Preview: Lagarde may trigger a “buy the dip” opportunity by trying to talk down the euro
Technical analysis
Considering the pair’s successful trading above 200-bar SMA, bullish MACD and an upward sloping trend line from December 21, GBP/USD bulls can stay hopeful to break multiple tops around 1.3700 marked during the current month. Following that, February 2018 low near 1.3765 and the 1.3800 threshold could lure the GBP/USD buyers ahead of highlighting the 1.4000 psychological magnet.
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