The pound surged past $1.40 for the first time in almost three years. According to Bloomberg, the rise was fueled by optimism of U.K’s rapid vaccine rollout, which could pave the way for an economy reopening this year.
- The pound is projected to enter the sixth week of gains after the U.K hit targets of immunizing its top four priority groups by February 15.
- Petr Krpata, a strategist at ING Groep NV, expects the pound to finish the year above $1.50 as it benefits from the faster vaccination process and stronger second-quarter economic rebound.
- Pound’s rally also follows a reduction in Brexit uncertainty after the trade deal with the European Union.
- The U.K currency has also been benefiting from the weaknesses in the dollar, making it the top-performing major currency this year.
- Expectations of quicker U.K economic recovery have led investors to bet on interest rate cuts to below 0% by the Bank of England.
The pound is currently gaining against the dollar. GBPUSD is up 0.36%