Good News From The UK, Is It Enough To Support The Pound?

 The outlook for the pound is getting brighter as there are signs the third wave of Covid-19 infections in the UK has come to an end.

This can be seen in the pound’s trading which has exhibited an excellent performance this week, which saw the currency rise higher against the greenback dollar.

On Monday, Britain reported a 38% decline in Covid-19 cases in a week, with new daily case figures continuing to show a decline for the sixth consecutive day.

A total of 24,950 new positive cases were reported today on Monday, compared to 39,950 cases reported last Monday. The latest report for Tuesday has yet to be released.

However, recent statements from Bank of England (BOE) policymaker Gertjan Vlieghe and disputes between the UK and the European Union (EU) have stifled the pound’s movement.

He told that the central bank should not reduce its stimulus until 2022 as the recent rise in inflation may be temporary and the Covid-19 outbreak remains a threat to the economy.

Vlieghe also said he would like to see the impact of the government's stimulus withdrawal on the economy in the coming months, including from its wage subsidy scheme.

While the UK and the EU are still unable to reach an agreement on the issue of the Irish protocol. Britain demanded the EU to renegotiate an agreement it had made last year.

At the time of writing, the pound traded slightly lower around 1.37900 following the rebound of the US dollar at the beginning of the European session.

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