According to the latest news, the British pound declined against a strengthening euro. It increased against a weaker U.S. currency ahead of U.S. Treasury Secretary nominee Janet Yellen’s testimony before Congress.
The U.S. dollar declined, giving the British pound a lift of 0.1% to $1.3601. The euro strengthened on the weakening greenback however it dropped by 0.1% against the pound and settled at 89 pence.
Notably, analysts are bullish on the sterling’s prospects against the euro, given Britain’s lead in vaccinations versus Europe’s relatively slower start.
According to a senior analyst at Danske Bank, Mikael Milhoj, more pound strength is in the cards this year with the United Kingdom vaccinating a lot faster than the European Union.
The United Kingdom has the world’s fifth-worst official death toll from coronavirus. It is racing to be among the first main countries to vaccinate people – seen as the best way to exit the pandemic and support the economy.
The British pound has also benefited lately from the Bank of England pushing out the horizon for a potential introduction of negative interest rates. Later on Wednesday, the central bank’s chief economist Andy Haldane is due to give a speech.
According to ING strategists, Bank of England Chief Economist Andy Haldane’s speech is unlikely to affect the pound much. The market has already adjusted to the lower probability of negative rates following Governor Andrew Bailey’s speech last week.
The index that gauges the dollar’s strength against other currencies fell by 0.1%
The U.S. dollar declined against a basket of currencies for a third straight session as improved sentiment buoyed riskier currencies, the Australian dollar and the euro.
The Aussie dollar increased by 0.5% to $0.7734. Meanwhile, the New Zealand dollar was a close second, up 0.35% at $0.7140
Notably, the index that gauges the dollar’s strength against a basket of currencies declined by 0.1% and settled at 90.390
The British pound increased by 0.2% against the dollar at $1.3668, up for a third straight day.
The world’s dominant cryptocurrency Bitcoin declined by 1% and settled at $35,529.