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Great Britain Pound Gains on Lockdown Exit Hopes

February 15, 2021 at 14:56 by Vladimir Vyun

A heap of different GBP notesThe Great Britain pound rallied today, gaining against all other most-traded currencies. The main driver for the sterling’s gains was hope that Britain will exit the lockdown sooner rather than later. Domestic macroeconomic data was also helpful to the currency.

Britain’s Prime Minister Boris Johnson twitted yesterday, reporting that the goal of 15 million vaccinated people has been achieved:

The news brought hope that the United Kingdom will be able to exit the lockdown relatively soon. Indeed, Johnson said that he is going to plot a “cautious but irreversible path” out of the COVID-19 lockdown:

We’ve got to be very prudent and what we want to see is progress that is cautious, but irreversible. If we possibly can, we’ll be setting out dates. If because of the rate of infection, we have to push off something a little bit to the right — delay it for a little bit — we won’t hesitate to do that.

The Prime Minister will detail the lockdown exit path on February 22. When asked if schools will be opened on March 8, Johnson said that he will do everything to ensure it.

As for macro data, Rightmove reported that the House Price Index rose by 0.5% unexpectedly in February. The increase followed three consecutive monthly declines. Tim Bannister, Rightmove’s Director of Property Data, commented on the result:

Last year the market was unexpectedly buoyed by buyers’ determination to move and satisfy their new lockdown-induced housing needs. We may well be seeing a continuation of that this year. Rightmove’s early 2021 buyer data shows that despite the imminent end of the stamp duty incentive, all of the key buyer metrics are ahead of early 2020, itself an active period as the market was boosted by the post-election ‘Boris bounce’. As well as the current lockdown motivating buyer demand again, the restrictions have also been a factor in limiting new supply, leading to some modest upwards price pressure.

GBP/USD rallied from 1.3846 to 1.3901 as of 14:53 GMT today, trading near the highest level since April 2018. EUR/GBP dropped from 0.8747 to 0.8721, trading near the lowest since May 2020. GBP/CHF climbed from 1.2338 to 1.2380, and its daily high of 1.2397 was the highest since February 2020.

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