British Pound (GBP) Latest: UK Government to Unveil Plans for Lifting Lockdown Restrictions
British Pound (GBP) Price Outlook – GBP/USD Chart and Analysis
- PM Johnson to unveil a four-part plan to lift restrictions.
- Sterling remains bid but further gains may be slow and limited.
UK Prime Minister Boris Johnson will later today unveil his plan for a phased exit of current covid-19 lockdown measures, as UK coronavirus data starts to paint a more positive picture. PM Johnson will finalize his plans during the day with his ministers and speak to the country via a press conference from 19:00 GMT. Many of the measures have already found their way into the mainstream press with the PM said to be taking a ‘cautious’ approach. Recent covid-19 data shows the infection rate now below 10,000 for the first time in months, while over 17.5 million people have had at least one vaccination. The UK government plans to have everyone over 50 and those with underlying health conditions to have at least one vaccination by April 15.
Sterling retains its recent underlying bid and trades either side of 1.4000 against the US dollar in quiet trading conditions. While the British Pound remains stable, the US dollar is slightly more volatile with traders watching the US Treasury market closely. The benchmark US 10-year now yields 1.38%, its highest level in over one year, while the 2-10s yield spread is now around 127 basis points, a multi-year high. While the US dollar is expected to weaken, the rise in US Treasury yields makes the greenback slightly more attractive against other lower-yielding currencies.
GBP/USD Daily Price Chart (June 2020 – February 22, 2021)
Retail trader data show 31.29% of traders are net-long with the ratio of traders short to long at 2.20 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise.
Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed GBP/USD trading bias.
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