On Monday 21st February, the British Pound gained strength following the British government’s announcement of a plan to re-open the UK economy. While some individuals are taking the plans with a pinch of salt, the majority of the population welcomed the good news as a glimmer of hope after months of negative news encumbered the nation.
If all goes to plan, the UK will see entertainment establishments and bars opening by mid-June.
So, what implications does this have on the GBP?
Being one of the first countries to lay out a plan for a full re-opening – one that would be implemented as early as this summer – the UK economy has undoubtedly been strengthened by this news.
Meanwhile, other important national data reports, such as the gloomy unemployment rates, don’t paint such a pleasant picture. However, the possibility of a brighter future is more than enough to influence the markets. And for the UK, that future appears to be within reach.
The GBP has been steadily gaining strength since last November, having gone through the final Brexit negotiations, a long-awaited deal, a vaccination roll-out program and now a reopening plan.
For the UK, which is still in a third nation-wide lockdown, it seems that the only way to go is forward. Will this winning-streak continue?
A Look at EUR/GBP
On February 24th , the British Pound recorded its longest winning streak against the Euro in the past five and a half years. The reason behind the Euro’s weakness in comparison to the British Pound can be traced back to the COVID-19 vaccination roll-outs and recovery plans. Currently, data indicates that the UK is set to recover quicker than Europe.
This situation is subject to change in the near future, depending on developments related to the pandemic and the ability of governments to bounce back from the damage done over the past year.
Moreover, the European Union may be catching up with the UK in terms of vaccinations, as a report recently showed that 75% of the EU could be vaccinated two months earlier than was expected.
Will the GBP continue to stun traders with its stellar performance throughout the year, or will reality bring the high-flying pound back down to earth?
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