Sterling faces an uncertain April
Going with the headline of the report today and the £ is set for an interesting month ahead. On one hand, we will see the UK economy opening up more as further restrictions are lifted. On the other, vaccine supply in the UK is set to dwindle, whilst the EU's supply is to triple.
The bump in UK vaccine supplies over the last few weeks did little to aid the Pound in the end, but a drop in supply could be negative on the market. Five-million doses from India has been delayed coming to the UK due to concerns in domestic covid-19 cases. Then the flow of vaccines from AstraZeneca exported from the EU hasn't yet been given the green light. Also, March 30th was the first time that second doses surpassed first doses administered in the UK. Charts currently show first doses are well below the 7-day average and are falling.
In the EU, all of a sudden it's a different story. Pfizer is doubling production into the EU and Johnson & Johnson starts delivering doses from mid-April. The EU are now vaccinating 0.6% of its population per day, the UK & US both sit at 0.8%. In May, the rate is expected to leap to 0.9%. With how the vaccine success in the UK has helped strengthen the £ this year, it's easy to see how the € could be making a comeback.
However, April 12th sees non-essential retailers re-open their doors in the UK. Outdoor attractions, outdoor hospitality and UK self-accommodation holidays are all back on the cards too. The hope is that consumers who have saved up during the last 12-months, have pent-up demand for these services and therefore will support the economy by spending their money. We will have to wait and see which hand has the tightest grip on the FX market throughout the month.
With it being an Easter weekend, our offices will be closed Friday 2nd & Monday 5th. We hope you enjoy the break and the rain stays away for us all, we will be back as normal Tuesday 6th.