Pound pushes higher on vaccine optimism and reopening of UK economy

LaToya Harding
·Contributor
·3 min read
Macro photo with dramatic shadows.
Sterling was 0.4% up against the dollar at €1.3844 and 0.51% ahead against the euro at €1.1754. Photo: Getty

The pound pushed higher on Monday as the UK’s vaccine rollout programme steamed ahead and the economy started to reopen under prime minister Boris Johnson’s roadmap out of lockdown.

Sterling was 0.4% up against the dollar (GBPUSD=X) at €1.3844 and 0.51% ahead against the euro (GBPEUR=X) at €1.1754.

The pound traded higher against the dollar as the UK's roadmap out of lockdown reached stage two. Chart: Yahoo Finance
The pound traded higher against the dollar as the UK's roadmap out of lockdown reached stage two. Chart: Yahoo Finance

From Monday, people in England are now able to meet in groups of six from any number of households for the first time in months, ending the usual “stay at home” messaging as part two of the easing of restrictions.

This is in an outdoor space only, including parks and private gardens, with the government requesting that people stay local, and maintain social distancing. Limits on the number of people who can meet outside in England won’t be raised until step three in May.

The move in the pound also comes as hospitalisations and COVID-19 related deaths continue to fall across the country in the face of a successful vaccination programme. Some 30 million people have now received their first dose of the coronavirus vaccine in the UK, according to the latest government data.

The UK government has also said that the vaccine program is “still on target” despite the recent supply problems and ongoing row with the European Union (EU).

READ MORE: Hedge fund blowup sends shockwaves through Wall Street and the City

On Sunday, Britain confirmed that it should be receiving extra COVID vaccine doses from Moderna (MRNA) in April, which should offset any shortfall elsewhere if the EU follows through on its threats to block AstraZeneca (AZN.L) from sending vaccines outside of the area.

Around 500,000 doses of the jab are expected to arrive in the first batch.

Overall, Britain has ordered 17 million doses of the Moderna vaccine, which has a 94% efficacy rate in trials. The UK has also ordered 100 million doses of AztraZeneca and 40 million doses of the vaccine by US drugmaker Pfizer (PFE) and German biotech firm BioNTech (BNTX).

The Moderna jab, which works in a similar way to the Pfizer vaccine, uses synthetic messenger RNA technology that can be quickly tweaked to address new mutations of a virus if necessary. Scientists have suggested the changes could be made in as little as six weeks. It is given in two shots, one month apart.

Experts have called the data on Moderna "very promising" and the addition of a third jab will boost the stocks of the UK's depleting COVID vaccines chest.

WATCH: Moderna vaccine expected to arrive in April, minister confirms

On Friday, data also revealed that UK retail sales rebounded slightly in February as Brits spent money on home improvement projects and lawn furniture in preparation for easing lockdown restrictions.

Official figures published by the Office for National Statistics (ONS) showed sales rose by 2.1% last month, in line with forecasts.

February's sales were boosted by strong demand for household goods. Sales in this category rose by 16%.

The ONS said there was "anecdotal evidence" this rise was caused by demand for "DIY products as consumers continue to improve their homes during lockdown" and demand for outdoor furniture "in preparation for the easing of lockdown restrictions, particularly the ability to meet friends and relatives in private gardens as the weather improves."

WATCH: What UK government COVID-19 support is available?