The Pound has driven higher following some positive covid-19 vaccine news and renewed hopes of a Brexit deal.
Risk assets have been soaring after reports that a coronavirus vaccine being developed by Pfizer has a 90% effectiveness rate against the virus. There are still challenges ahead regarding this new vaccine, however. For example, the logistics of how it will be mass-produced and distributed at the extremely low temperatures required for it to be effective.
Nevertheless, the markets are very excited by these positive results. There’s a good chance the vaccine will be available to some before the end of this year, with more widespread inoculations available next year.
An effective vaccine against Covid-19 has generally been viewed as the only real way of bringing the world back to normality after months of lockdowns and huge amounts of deaths. Therefore, stock markets and ‘risk’ currencies have risen heavily off the back of this announcement.
In other news, the Pound has also been supported by positive Brexit comments from Rishi Sunak and Boris Johnson, both stating that talks were making progress and they expect a deal with the EU. Furthermore, the House of Lords once again rejected the controversial Internal Market Bill yesterday which also makes a deal more likely with the EU. Finally, some better-than-expected UK employment and wage figures out this morning has also lifted the Pound.
As a result, the GBP/USD has pushed up around 1% from yesterday’s low and trades at a fresh 2-month high. The GBP/EUR has risen around 1.5% from yesterday’s low and also sits at a 2-month high.