The pound has opened the new week in a sombre mood as sentiment follows the close of last week. On Friday, there was not enough upside momentum to carry GBPEUR through the 1.1280 mark, which now makes that the sixth test in 7 months to break to the upper barrier. GBPUSD finds itself in a similar position, having come off the 1.37 highs to sit at 1.3540 at the time of writing. There is little to report on data releases this morning, to potentially move the pairs, with the majority of releases coming later in the working week. Sterling traders will once again look to the Government briefings to plot the course over the coming days. The BBC is reporting that vaccinations will start to be given to the over 70s this week, with 10 new vaccination hubs from today, meaning the original goals set out by the Government could be achievable.
Last week saw short positions pile up against the dollar, which stands at the highest position since April 2018. With vaccination programmes rolling out, traders appear to be moving to risk sensitive currencies, as appetite in the wider market grows. As we saw at the start of the pandemic, markets shift to the reserve currency to weather any storms. As the outlook seemingly begins to improve, the positions are unwound and riskier currencies can strengthen.
Have a great day.
Jack Nicholls, Relationship Manager.
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