Good morning,
Yesterday the government announced a ‘strengthened package of support’ to boost vaccinations and testing in Greater Manchester as well as parts of Lancashire as the Delta variant continues to spread rapidly. The support has been introduced after the same measures were provided in Bolton and proved successful in halting the spread of Covid-19 and reducing cases. GBP dropped against both the EUR and USD to 1.1594 and 1.4123, though it quickly gained its composure and closed the day closer to 1.1628 and 1.4155 respectively.
As mentioned in yesterday’s update, the initial delay in reopening for a few weeks may not damage GBP sentiment, though the risk of further delays could hamper the UK’s economic recovery and put the pound on the back foot. Focus will shift again to the vaccination program as the government race to vaccinate the population. A delay in opening of 2 weeks would give all over 50s a chance to be fully vaccinated and give enough time for the vaccines to take effect before restrictions are lifted.
Looking ahead today, the Bank of Canada’s decision on any interest rate changes is due at 2pm. The consensus is that rates will stay the same, though the report will provide us with an insight into the BoC’s outlook on Canada’s economy, and may hint towards any changes in the quantitative easing program. The EU and UK negotiators meet again in London searching for compromise to reduce issues with the trade border between Northern Ireland and the Great Britain. GBP is extremely sensitive to Brexit news so headlines could be the main influence today.
Have a great day.
Thomas Read, Senior Relationship Manager.
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