GBP/USD has been weathering dollar strength as “controversial” is what Bank England Governor Andrew Bailey called negative interest rates. Biden’s inauguration, immunization figures and central bank speculation are critical for the cable to extend the rally towards 1.40, FXStreet’s Analyst Yohay Elam reports.
Key quotes
“Headlines about new vaccination centers would be supportive, while delays in production or distribution of the jabs would weigh on the pound.”
“UK Consumer Price Index statistics for December are projected to show another increase from 1.1% to 1.4%. Unless inflation nears 2%, sterling will likely ignore the release. More importantly, Friday’s Retail Sales data carries uncertainty. The pound will likely rock on any outcome.”
“The new occupant of the White House will probably sign Executive Orders in his first days in office. Some, like returning to the Paris climate accord, was well-telegraphed. Any economic surprises may also move markets. Perhaps most importantly, Biden may opt to stretch the gap between the first vaccine dose and the second – following the UK. That could accelerate America’s immunization pace, albeit not without risk.”
“Some supporters of outgoing President Donald Trump plan to express their dissatisfaction at his loss, and violence is feared. While Trump leaves quietly and violence is contained, investors will likely continue shrugging off the political drama in the Capitol insurrection aftermath.”
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