Despite the easing of lockdown restrictions and a quick and efficient vaccine roll out, the pound has struggled to continue with its bullish run against other currencies. Although the GBP has considerably increased from levels seen at the start of the pandemic the highs of 1.17 seen in recent weeks are now seeming to be unobtainable.
Previously the News around Covid-19 and the vaccinations have been the main drivers for market volatility but the last week has shown this now may now not be the case. Whilst there are not any major data releases in the coming week there is hope that this will be a key driver for any future market trends.
Prime Minister Boris Johnson has come under fire this week with many allegations made against him. Its accused he would rather “let the bodies pile high” than order another lockdown. A statement he has now denied. The Prime minister is also facing questions regarding the cost of downing street flat refurbishment. This coupled with the upcoming local, regional and mayoral elections on May the 6th could add risk to the UKs currency.
Over 33 million adults in the have now received their first covid vaccine, half of which have also had their second vaccine. The UKs government has also ordered 60 million more doses of the Pfizer vaccine ready to supply booster jabs in the autumn months. This will help support the economy by preventing further lock downs and allowing the current restrictions to be eased further. The next date for further restrictions to ease is currently set for May 17th which will see pubs and restaurants be allowed to open indoor service. There are also hopes that international travel restrictions will also be partially lifted.
In the recent weeks Countries in the Eurozone have endured their 3rd wave of Covid-19. With hospitals in France becoming dramatically overwhelmed due to a surge in new infections many countries made the decision to Tighten restrictions to help prevent further new infections. They have also stepped up their vaccination rollout after a slow start. Its currently estimated under a quarter of the EUs population have had their first jab of the Covid-19 vaccine.
European Central Bank President Christine Lagarde made a said in a statement Wednesday that 70% of the EU’s adult population will have been vaccinated with at least the first jab by June. Lagarde is hopeful the vaccination provides a light at the end of the tunnel. This renews fresh hopes that the EU will regain control of the virus and allow them to re-open for tourists which will provide a much-needed boost for the economy. The ECB are still persistent with the projection of 4% growth over the full year.
Yesterday the release of the latest flash PMI data from the Eurozone has shown a sustained growth in the private sector. Due to a big expansion in manufacturing production the Eurozones business activity has had fast growth. Notably the fastest growth rate since July 2020. The EU & UKs provisional Brexit deal is due to expire this month. Further approval of this is dependant on a vote from the EU parliament.
Economi data out today from the EU is its Consumer Confidence figures which are due to be released today at 10am.
President Joe Biden Released a statement Wednesday unveiling the 1.8 Trillion economic spending package proposal. The new spending plan is focused on families and education. Bidens aim is to inject federal money to make families lives easier. Also included were plans to raise the top Marginal Income from 37% to 37.9% and introduce an new capital gains tax on investors earning above 1 million USD.
A recent national poll of American’s showed that 55% approved of Presidents Bidens work within his First 100 days in office. Specifically, 65% approved of his handling of the coronavirus pandemic. America are Working hard with their vaccine roll out and have 53% of the population vaccinated. This has enabled the US to offer 60 million vaccines to India who are currently experiencing a deadly wave of the virus that they are struggling to control.
The Federal Reserve Announced Wednesday That they will be keeping interest rates at 0.25%. they have been at this level since the beginning of the global coronavirus pandemic. Despite the US economies growing strength the Federal reserve has shown no signs it is ready to reduce the support for the ongoing recovery. Employment has also shown improvement, but the path of the economy will depend on the virus and the vaccination progress. Fed Chair Jerome Powell stated in the news briefing ‘it is not time yet’ when discussing any changes in policy. Powell repeated that they are a long way from a return to full employment.
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