The Pound to US Dollar (GBP/USD) exchange rate was supported today as the UK announced the approval for use of its third Covid-19 vaccine.
The pair is currently trading around $1.3613.
Pound (GBP) Supported by Vaccine Rollout Economic Recovery
The Pound (GBP) was supported today following on from Prime Minister Boris Johnson’s coronavirus press conference where he announced the army would be brought in to help aid the vaccine rollout.
Britain’s medical regulator today approved Moderna’s Covid-19 vaccine for use, with the UK agreeing to purchase an additional 10 million doses.
However, the Moderna vaccine is not expected to play a part in the first stage of Britain’s vaccine rollout.
Health minister Matt Hancock spoke on the approval:
‘We have already vaccinated nearly 1.5 million people across the UK and Moderna’s vaccine will allow us to accelerate our vaccination programme even further once doses become available from the spring.’
US Dollar (USD) Struggles on Underwhelming Payrolls Report
The underwhelming nature of December’s US non-farm payrolls report did little to support the US Dollar (USD) today.
A decline in the headline payrolls figure highlighted the increasing pressure on the US labour market, giving investors more reason to sell out the Greenback.
Furthermore, a video statement from Donald Trump on Thursday night condemning the mob of his supporters who stormed the US Capitol Building in Washington DC on Wednesday was met with criticism from Trump allies and supporters.
In the video he stated:
‘Like all Americans I am outraged by the violence, lawlessness and mayhem [the MAGA faithful who looted and vandalised congressional property have] defiled the seat of American democracy.’
‘To those who engaged in the acts of violence and destruction, you do not represent our country… To those who broke the law, you will pay.’
The President however, for the first time conceded that Congress had completed the certification of the election results and that a new administration will be inaugurated on January 20th.
Pound to US Dollar Outlook: US Dollar Investors to look to Inauguration
Pound investors will continue to keep an eye on any Covid-19 updates, with any news that coronavirus cases are beginning to fall and the vaccine rollout is successful potentially bolstering Sterling further.
US Dollar investors will be looking toward key data releases next week including inflation rates and jobless claims, where further jobless claims could cause the Greenback to suffer further.
Politics will also remain a key focus with hopes that President Elect Joe Biden’s inauguration will pass by smoothly, however indications of US stimulus from the Biden administration will likely increase risk appetite, which would weaken demand for the safe haven Greenback.