Following on from yesterday’s abysmal GDP figures, sterling continued to lose ground against most currencies; with declines against the euro and dollar registering their worst rates in two and a half months. On top of this, as mentioned in previous daily updates, the pound is now also ultra-sensitive to global stock market sell offs, as sterling is seen as a “Risk on” currency, meaning that when confidence is high, stocks and GDP benefit in tandem – but when they wobble and start to sell off as they did yesterday, GBP pairs are dragged lower with them.
In better news for the UK and the pound, inflation figures released at 7am this morning were largely in line with expectation, with prices rebounding from their dangerous levels last month. Whilst they are some way away from the Bank of England’s target, it should be enough for them to continue with their wait-and-see policy regarding further rate cuts for now. In addition, stocks jumped on London’s open this morning, as American pharmaceutical company Moderna announced that its trial COVID-19 vaccine had produced a “Robust immune response” in all patients tested – leading the market to believe a permanent answer to the Coronavirus crisis may be edging closer.
Have a great day.
Author: Joshua Haden-Jones, Senior Relationship Manager
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