The pound lost ground today as US treasury yields have risen and concerns grow around the AstraZeneca vaccine side-effects .
After a positive start to the week, Sterling dropped against the USD as investor risk sentiment reduced with the Federal Reserve seeming to be warming up to the idea of raising interest rates sooner than previously expected. In addition, Joe Biden's infrastructure programme now has a higher chance of passing after the Senate ruled it can pass via reconciliation, which is a quicker process. This could lead to faster growth in the US, strengthening the safe-haven dollar.
Sterling also lost momentum against the Euro as the UK's AstraZeneca vaccine rollout is temporarily halted amongst the under 30's amidst blood clot concerns. Despite adding the Moderna vaccine to its programme today, the AstraZeneca vaccine is expected to make up the majority of the UK's supplies, which may lead a loss of momentum in the rollout. Some analysts also feel that traders are taking some profits on the Pound’s recent solid run.
As a result, the GBP/USD hit a 1-week low after losing nearly 2-cents in the past 24hrs. The GBP/EUR touched a 1-mth low having dropped around 2.5-cents from Monday. The rates continue to trade within the familiar ranges and the data calendar is relatively quiet this week.