GBPUSD - Pound hit three-year highs against the Dollar
GBPUSD - Pound hit three-year highs against the Dollar on Thursday and is likely to continue its bullish trajectory in the near term, but could undergo a change of direction once the impact of Brexit starts to make its mark.
The pound's strong jump was caused in part by the weakness of the dollar and also by British Prime Minister Boris Johnson, saying that the restrictions would be phased out, giving the appearance of an exit from the pandemic crisis, by statistics on changes about infected and cures from Covid-19. The prime minister appeared anxious to suppress growing optimism for a faster reopening, insisting on the need for more data and certainty on the effectiveness of vaccines in reducing the rate of transmission.
More data from the vaccine's launch in the UK are expected today, though it's unclear whether it will be effective in reducing the spread of the infection.
While the UK vaccination campaign is "fueling hopes for a rapid recovery and hence the upward influence on the pound, it should be noted that as the effects of Brexit become more evident, the trend is likely to change. ", cit. Commerzbank
However, it may take a "considerable time before the impact of the pandemic and that of Brexit become more clearly discernible", cit. Commerzbank.
Factor that could cause GBPUSD to reverse.
Currently, the pair is approaching a psychological level of 1.4000, a level watched by all investors. "There is a good chance that the pound will hold this level and appreciate in the short term, more than currently expected", cit. Commerzbank.
The latest CFTC positioning data on the Pound showed that speculators added bullish positions.
The pound's strong jump was caused in part by the weakness of the dollar and also by British Prime Minister Boris Johnson, saying that the restrictions would be phased out, giving the appearance of an exit from the pandemic crisis, by statistics on changes about infected and cures from Covid-19. The prime minister appeared anxious to suppress growing optimism for a faster reopening, insisting on the need for more data and certainty on the effectiveness of vaccines in reducing the rate of transmission.
More data from the vaccine's launch in the UK are expected today, though it's unclear whether it will be effective in reducing the spread of the infection.
While the UK vaccination campaign is "fueling hopes for a rapid recovery and hence the upward influence on the pound, it should be noted that as the effects of Brexit become more evident, the trend is likely to change. ", cit. Commerzbank
However, it may take a "considerable time before the impact of the pandemic and that of Brexit become more clearly discernible", cit. Commerzbank.
Factor that could cause GBPUSD to reverse.
Currently, the pair is approaching a psychological level of 1.4000, a level watched by all investors. "There is a good chance that the pound will hold this level and appreciate in the short term, more than currently expected", cit. Commerzbank.
The latest CFTC positioning data on the Pound showed that speculators added bullish positions.