The British pound sterling now has every chance of a large-scale decline in tandem with the US dollar, but the market clearly believes in its strength and does not give up so easily. The session on Wednesday for the GBPUSD pair was in decline after the renewal of the peak at 1.3759, but today the Briton is aiming at stabilization and restoration of positions. In the short term, the GBPUSD pair may rise to 1.3700, but in case of catching above this level, the recovery target will move to 1.3750.
From the point of view of fundamental analysis, there is one negative around the pound. Take, for example, the UK’s readiness to introduce new quarantine measures for those entering the country from Africa and South America – people are planned to be placed in so-called quarantine hotels in order to prevent the spread of new strains of COVID-19. The UK became the first European country to cross the threshold of 100 thousand deaths from coronavirus and became the world’s leader in such a sad indicator as the number of deaths per 100 thousand people. The Boris Johnson administration clearly has questions about the effectiveness of the measures that the government is taking in the fight against covid.
Given that the UK economy in the first quarter of 2021 is likely to continue to slide into negative territory due to the lockdown, there is no positive for the pound. Moreover, the dollar looks strong enough. However, the market clearly believes in the potential of the pound after the Brexit and is in no hurry to sell it.
Market forecasts, analytics and stock news