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The pound is still strong against the euro and the dollar this morning ahead of a busy week of economic data releases. The pace of the vaccine programme and hopes for economic recovery are still providing support for sterling, with some analysts now questioning how long this will last.
In Europe, a drop in public confidence towards the AstraZeneca vaccine and supply issues continue to affect the vaccine rollout. Boris Johnson is due to speak with his EU counterparts this week about the dispute surrounding supplies of the AstraZeneca vaccine. The EU summit, which is due to take place later this week, will also address the issue.
In the US, the markets are looking ahead to a series of speeches from Federal Reserve Chair, Jerome Powell. The first will take place later today.
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GBP: Sterling awaits data releases
The pound is still at strong levels against the euro and the dollar this morning. The progress of the UK’s vaccination programme and hopes for a swift economic recovery are still supporting sterling. Almost 28 million people in the UK have now had their first dose of the vaccine.
Despite this, the Bank of England stuck to its cautious approach at the monetary policy meeting last week, largely ignoring the progress made by vaccines and improving economic data, which disappointed the markets.
This week is a busy week for economic data in the UK. Employment figures for January will be released tomorrow, as well as CBI Industrial Trends Orders, which measures changes in the levels of factory orders. Inflation rate figures will be released on Wednesday, followed by retail sales on Friday.
GBP/USD chart
EUR: Vaccine woes weigh on euro
The euro is weak against the dollar and the pound this morning, as Europe’s slow vaccine progress continues to weigh on the single currency.
It’s thought that the temporary ban of the AstraZeneca vaccine in some European countries has damaged public confidence and will extend delays in administration. The European Medicines Agency cleared the vaccine for use last week, however.
Disputes between the EU and the UK surrounding vaccine supply continues, with European Commission President Ursula von der Leyen saying that the EU is still waiting for vaccine exports from the UK. The Prime Minister is due to have a phone call with his EU counterparts this week on the matter.
PMI data will be released for the Eurozone this week and the EU economic summit will take place on Thursday.
USD: Jerome Powell to make three appearances this week
The dollar remains strong against a basket of currencies this morning and the markets are looking ahead to Federal Reserve Chair, Jerome Powell’s speech later today. This will be the first of three public appearances this week.
Powell is expected to reiterate the Fed’s message of ongoing support and downplay concerns about rallying bond yields. He may also repeat the message that rate hikes will not be expected in the near future.
There will also be a series of speeches from other Fed officials this week on a variety of topics. As well as this, it’s a busy week for economic data, with durable goods orders and personal spending figures due to be released.
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