GBP/USD slips as Boris Johnson stresses ‘cautious’ approach to easing lockdown
Philip McHugh February 18th 2021 - 2 minute read
The pound’s recent bullish run faded on Wednesday, amidst concerns over the timeframe for easing lockdown measures in the UK.
Meanwhile, Sterling is enjoying modest gains so far this morning, with GBP/EUR stable at €1.1518 and GBP/USD buoyed at $1.3885. GBP/CAD has firmed at C$1.7634, while GBP/AUD and GBP/NZD have ticked higher to AU$1.7895 and NZ$1.9311, respectively.
Looking ahead, the publication of the Eurozone’s latest consumer sentiment index will be in focus today. Will another slump in household sentiment drive the euro lower?
What’s been happening?
The pound edged lower through yesterday’s trading session as GBP investors expressed some doubts over how quickly the UK will ease its lockdown measures.
This came on the back of comments from Boris Johnson, in which he stressed any easing would be done cautiously and that he would be taking a ‘data not dates’ approach.
These concerns overshadowed the release of the UK’s consumer price index, which revealed UK inflation accelerated at a faster-than-expected pace last month.
The US dollar, meanwhile, continued to trend higher on Wednesday, rising in response to strong US retail sales figures, which reported sales growth rocketed up a whopping 5.3% in January, against forecasts for a far more modest 1% expansion.
Adding to the upside in the ‘Greenback’ was the continued rise in US Treasury yields which struck a one-year high during yesterday’s session.
At the same time, the bullishness of the US dollar continued to put pressure on the euro yesterday, which also suffered due to ongoing concerns over the EU’s slow vaccination rollout.
What’s coming up?
Turning to today’s session, the most notable data release will be the publication of the Eurozone’s latest consumer confidence index.
February’s preliminary figures are expected to report that the mood in the Eurozone remained pretty gloomy, potentially exerting some more pressure on the euro.
In the absence of any data, the focus for GBP investors is likely to remain on the UK government’s lockdown plans, with traders looking for any additional hints as to the timeframe for easing restrictions ahead of the publication of Boris Johnson’s roadmap next week.
Meanwhile, across the pond, we could see the US dollar stumble later this afternoon, if the latest US initial jobless claims disappoint once again.