Sterling holds ground as Britain navigates its way out of lockdown
Sterling held on to recent gains against the dollar today as Britain lifted several lockdown restrictions and took a big step towards reopening its economy.
The pound has gained against the dollar for two weeks straight and consolidated near the $1.41 mark this morning.
Cafes, bars and restaurants will reopen for indoor service today and a ban on international travel has also been lifted.
“It has been a well-telegraphed move, but major re-opening in the UK today should continue to be welcomed by UK asset markets and the pound,” said ING strategists in a note to clients.
Sterling’s gains this year have been aided by a more hawkish Bank of England, which has begun tapering asset purchases.
The FTSE 100 has also provided a benchmark for the UK’s economic recovery, rising 11 per cent this year on reopening optimism.
The blue-chip index has pared some of those gains in the last few sessions on concerns around an Indian variant of coronavirus.
“Despite threats from the Indian variant, the scheduled re-opening will keep expectations of a summer UK recovery on track and feed into the BoE’s upbeat assessment of the UK activity outlook,” ING strategists added.
Economic confidence was also displayed in a new survey today, which showed that jobs optimism among UK employers has hit an eight-year high.