GBP outperforms as COVID cases start to fall

Joshua Mahony MSTA Scope Markets

GBP outperforms as Covid cases start to fall
A decline in UK Covid cases has helped improve sentiment for UK stocks. Meanwhile, the push to impeach Trump continues, yet runs the risk of stoking further discontent.

Dollar on the rise, but would a Trump impeachment help or hinder sentiment?
High street names tick higher as Covid cases turn lower.
GBP outperforms with Brexit and Covid fears easing somewhat.

European markets have enjoyed a tentative foray into positive territory in early trade today, with traders continuing to weigh up a myriad of positive and negative drivers. The US dollar is back on the front-foot once again this morning following sharp declines yesterday, with traders keeping a close eye on events in Washington. A lot changes in a week, and that timeframe has taken Donald Trump from hoping to overturn his election loss to merely hoping he can remain in the White House for another week. Pressure on Pence to enact the 25th Amendment seem unlikely to succeed, yet there is a strong chance of impeachment in Trumps final days which would dent his hopes of running again in 2024. Nevertheless, impeachment alone would not prohibit the President from running once more, with another additional vote on the matter required to ensure he cannot run again. Nevertheless, while many Republicans will hope that impeachment and the recent tech lockdown will end his movement, the plans for armed protests throughout the country highlight the problems that come when a person with 70 million supporters is forcibly shut down.

A number of high street stocks are seeing tentative gains this morning, with the UK seemingly turning a corner on the first against this latest Coronavirus wave. With new cases finally starting to decline, there is a feeling that the Christmas surge is behind us. The UK vaccination push has already been impressive, and there is room for further optimism given the AstraZeneca rollout. As we approach the two-week mark into Brexit, fears of a complete collapse at the border have instead turned into stories of Lorry drivers losing their Ham sandwich. Thus with vaccinations ramping up, Covid-cases turning lower, and Brexit fears subsiding, it comes as no surprise to see the pound outperform of late.

Ahead of the open we expect the Dow Jones to open 35 points higher, at 31,104.

Author

Joshua Mahony MSTA

Scope Markets

Joshua Mahony is Chief Markets Analyst at Scope Markets. Joshua has a particular focus on macro-economics and technical analysis, built up over his 11 years of experience as a market analyst across three brokers.

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