Sterling Appreciates, Boosted by Lockdown Exit Plan
- EUR/GBP remains in bearish momentum, breaks 0.8670
- The British pound remains well bid
- The UK unveils plan to ease restrictions
Sterling Appreciates Boosted by Lockdown Exit Plan
Strong sterling buying continues to be one of the main characteristics of the recent currency market environment. The Great British pound makes new tops against most of its peers. This is due to market participants remaining heavily in favor of the UK currency. The latest update to lift the pound was the launching of the lockdown exit plan on Monday. Prime Minister Boris Johnson revealed that the government is considering ending the lockdown by June 21, if strict conditions are met. Starting from March 8, all schools will open. This is part of the first step of the four-stage plan for easing the lockdown in England.
Sterling traders cheered the progress regarding the vaccination program. This is underpinned by a decrease in the daily average of confirmed cases along with a drop in the hospitalization rate. The GBP/JPY moved strongly to the upside on Tuesday, peaking at a high of 148.36, just a few points shy of the 148.88 reached in Mar 2019.
Recent Developments Encourage Upside Trend
The GBP/USD pair made a new top earlier today when the pound reached $1.41 for the first time since April 17, 2018. Currently, the pair has eased off its highs and trades around 1.4070. Multi-month highs have also been achieved for the pound against the Canadian dollar and the Swiss franc.
The trend in the UK currency has been significant to the upside since the pandemic hit in March 2020. The GBP/USD marks an increase of over 20% from the period between late March 2020 and late February 2021. For the same period, the GBP/JPY is up nearly 20%, while the GBP/CHF has appreciated by almost 15%.
The main trend for the UK currency remains bullish. However, technical indicators such as MACD and RSI point to conditions that generally portray an overbought market. On the other hand, the recent positive developments in the UK have been a solid driver for the currency to continue on its way to the upside.
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