On Wednesday, the British pound increased over $1.37 ahead of comments from Federal Reserve Chair Jerome Powell. Meanwhile, the United Kingdom’s coronavirus vaccine rollout also offered support to the sterling.
Hopes of a large U.S. fiscal stimulus package has fuelled risk sentiment in markets in recent weeks, benefiting sterling. Market participants are expecting Powell to renew a commitment to the ultra-easy policy.
Furthermore, the United Kingdom’s successful initial vaccine rollout has also supported the sterling. However, its death toll from the COVID-19 pandemic surpassed 100,000 on Tuesday.
At 0948 GMT, the British pound was up 0.05% against the American currency at $1.3742, close to its May 2018 record of 1.3759 hit earlier.
The sterling increased by 0.3% against the euro and settled at 88.26 pence. Incidentally, this is a new eight-month record versus the single market currency.
Furthermore, analysts attributed the sterling’s gains against the euro to a slower coronavirus vaccine rollout in the European Union than in the United Kingdom.
According to the senior EMEA market strategist at BNY Mellon, Geoffrey Yu, the euro is clearly undermined by ongoing concerns over vaccine rollout speed and supply.
The central bank is carefully monitoring the euro’s exchange rate
Meanwhile, the U.S. dollar index declined by 0.22% and settled at 90.143. Significantly, the increase increased as high as 90.614, its strongest since January 20, earlier in the session. The euro declined by 0.1% and settled at $1.2146.
According to the European Central Bank President Christine Legarde, the central bank is carefully monitoring the singe currency’s exchange rate.
Risk-sensitive currencies, the Australian and New Zealand dollars witnessed gains. The Aussie increased by 0.52% against the greenback, while the kiwi boosted by 0.61%.
Furthermore, emerging-market currencies witnessed an easing of recent selling pressure with the Brazilian real boosting more than 1%.
The American currency increased by 0.1% and touched 103.72 yen following a similar-sized fall overnight.