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UK to Announce Vaccine Passports and WFH Guidance in Move to Plan B

British Pound (GBP) Latest: GBP/AUD, GBP/NZD, GBP/CAD Under Pressure

British Pound (GBP) Latest: GBP/AUD, GBP/NZD, GBP/CAD Under Pressure

Martin Essex, MSTA, Analyst

GBP price, news and analysis:

  • The British Pound is beginning to lose ground against the commodity currencies: the Australian Dollar, the New Zealand Dollar and the Canadian Dollar, suggesting that its recent broad strength may be drawing to a close near-term.
  • Longer-term, though, the outlook for Sterling remains healthy and a near-term correction would not harm the longer-term outlook.
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GBP easing back

GBP/AUD, GBP/NZD and GBP/CAD are all losing ground Thursday, perhaps warning of a more general near-term setback for the British Pound. That, however, would likely do little to halt the broad advance in the currency once any correction is over. As can be seen in the chart below, GBP/AUD has eased to its lowest level for a month as AUD benefits from the prospect of a recovery in the global economy from the slump caused by the coronavirus pandemic. However, the January 20 low at 1.7584 should provide some near-term support if the slide in the pair continues.

GBP/AUD Price Chart, One-Hour Timeframe (January 22 – February 25, 2021)

Latest GBP/AUD price chart.

Source: IG (You can click on it for a larger image)

Similar patterns can be seen in the GBP/NZD and GBP/CAD charts below, with 1.8862 the key support level for GBP/NZD, the low touched on February 4, and 1.7350 the support level for GBP/CAD, the low touched by the pair the same day.

GBP/NZD Price Chart, One-Hour Timeframe (January 22 – February 25, 2021)

Latest GBP/NZD price chart.

Source: IG

GBP/CAD Price Chart, One-Hour Timeframe (January 22 – February 25, 2021)

Latest GBP/CAD price chart.

Source: IG

From a fundamental perspective, the next big event for Sterling traders will be the UK Budget next Wednesday, when Chancellor of the Exchequer Rishi Sunak is reported to be announcing giveaways to help the UK economy bounce back post-lockdown. Note, though, that Budgets rarely have a major impact on Sterling.

We look at currencies regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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