The sterling began its "hike" to the current rise on Thursday, February 18. The pound skyrocketed amid positive data on vaccinations against COVID-19. On Friday, the upward trend continues.
Sterling rose against the US dollar on Thursday amid hopes for a speedy economic recovery thanks to the COVID-19 vaccine. The sterling took advantage of the current weakening of the US dollar, rising above the psychologically significant level of 1.4000. The greenback's weakness was of invaluable help to the pound: its quotes soared 0.2% to 1.4008. On Friday, February 19, the GBP/USD pair dipped slightly and now runs around 1.3997-1.3998
The rally of the sterling, constantly striving for new highs, occurred for the first time since April 2020. Experts are recording the upward movement of the sterling for the sixth week in a row after the successful mass vaccinations in the UK. Progress on this issue will help lift restrictive measures, which led the country's economy to a severe recession.
According to experts, the sharp rise in the sterling is due to technical factors, since there were no economic statistics for the UK. The market is currently awaiting data on retail sales and business activity in the United Kingdom. Recall that at the beginning of this year, consumer spending in the country almost did not grow, slowing down to the level of May 2020. Most economists expect these indicators to decline. In such a situation, the sterling will be under strong pressure.
Last year, the UK experienced the most severe economic recession, which has not been recorded for more than 300 years. At the moment, the situation is improving, so experts expect an active recovery of its economy by the end of 2021. An invaluable help to the pound is provided by the decision of the Bank of England to refrain from introducing negative interest rates. Experts expect the situation to stabilize in the short and medium-term planning horizons.
