GBP/USD to receive another shot in the arm from the usage of Moderna's vaccines

GBP/USD has been bouncing from the lows as the dollar falls with yields. The UK's vaccine expansion may support sterling, while the Fed's minutes mean uncertainty, Yohay Elam, an Analyst at FXStreet, reports.

Moderna's jabs serve as a boost, the Fed poses a risk

“Moderna's vaccinations are joining those by Pfizer/BioNTech and AstraZeneca in Britain's battle against COVID-19. The UK already seems to have a lid over the spread of the disease – contrary to France which is under a strict lockdown and Germany, which is about to enter one. The deployment of the new inoculation is set to help contain the spread and reach more people. It also implies the potential for a quicker reopening.”

“Investors await President Joe Biden's speech on the infrastructure program, which has higher chances of passing after the Senate parliamentarian ruled it can pass via reconciliation, a quicker process. If the US grows faster, the rest of the world may benefit. Demands from conservative Democrat Joe Manchin to keep the corporate tax at 25% is music to investors' ears – and may push the safe-haven dollar down.” 

“Optimism from the Federal Reserve poses a risk to GBP/USD gains. The Federal Reserve's meeting minutes may show more members are warming up to raising interest rates sooner rather than later – and that could boost the greenback.”

“Some resistance awaits at 1.3855, a swing high from last week, followed only by the April peak of 1.3920. The first cushion is at 1.3805, where the uptrend support line hits the price. It is followed by 1.3740, and then by 1.37.”