GBP/USD eases back to 1.4000 as week draws to a close

GBP/USD has eased back from prior session highs at 1.40458 but looks likely to hold onto a 1.4000 handle into the close of Friday FX trade at 22:00GMT. That means the pair is set for on-the-day gains of about 0.3% and gains of about 1.2% on the week. That means that AUD will just about pip sterling as the best performing currency in the G10 FX this week, up closer to 1.4% on the week versus the USD, while GBP will have to share the second spot with NZD, which is up by an almost identical magnitude on the week as sterling.

Positive pandemic related trends, be it the country’s vaccine rollout, news about vaccine efficacy, or falling virus infection rates all point in the same direction – the UK is on course to be able to reopen its economy with confidence ahead of the likes of other developed market economies such as the EU.

UK Covid-19 Updates

The UK reported 12K new Covid-19 infections on Friday, 533 new deaths and, whilst the total number of people to have received at least one Covid-19 shot jumped to nearly 17M. meanwhile, the UK government’s weekly estimate of the virus R rate has been revised lower again to 0.6-0.9 from 0.7-0.9, implying a daily growth rate -6% to -3% versus last week’s -5% to -2% infection growth rate.

Elsewhere, the Telegraph disclosed some of the findings of a Public Health England study, which is set to formally be released later in the month, which has reportedly found the vaccines to reduce Covid-19 infections and transmission by two thirds and claims it is the first study in the world to use real-world data. Furthermore, evidence continues to mount that seems to vindicate the UK’s vaccination strategy (i.e. extending the time period between the first and second doses of the Pfizer vaccine to three month from the recommended one in order to get more people vaccinated with at least one dose).

Senior government sources told the Sun that outdoor mixing will be allowed in parks and possible even gardens from 2 April. UK PM Boris Johnson Roadmap to Recovery will be finalised in a meeting with the Covid Operations war committee on Saturday, to then be officially unveiled to the public next Monday. Schools are expected to be reopened for in-person learning on 8 March, followed by the re-opening of non-essential retail. The re-opening of the hospitality, fitness and leisure sectors remains up in the air.