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The Bank of England (BoE) has shut the door on negative rates – allowing the pound to fight back against the soaring dollar. UK GDP may provide the next boost, Yohay Elam, an Analyst at FXSTreet, reports.

Key quotes

“After topping 500,000 injections per day and reaching over ten million people, the UK seems to be on course for an early easing of restrictions. Any such announcements by the government may boost the pound.” 

“The economic calendar features another speech from Bailey, but he is unlikely to provide additional insights immediately after ‘Super Thursday.’ More importantly, investors will watch if his optimism on how 2020 ended is vindicated.”

“The UK releases Gross Domestic Product figures for the fourth quarter, including an update on December, when the government imposed restrictions on London. Industrial output figures for the last month of the year are also of interest.”

“Former President, Donald Trump’s trial, is scheduled to begin and that may push Democrats to rapidly approve a large package. That is the optimistic scenario for markets. In such a case, the dollar would have more room to rise alongside yields. The other, and perhaps more realistic option, is that negotiations with moderates from both parties extend for another week or two, somewhat eroding the greenback’s gains.”