UK’s ability to reach its covid vaccine benchmark of 15 million has favored the pound for last 3 days. The Tory-government’s action also helped in gaining good covid results, which in return led to renewed chatters over easing virus-led activity restrictions. The broad US dollar weakness amid hopes of the US coronavirus (COVID-19) stimulus package helped the pound to gain more support.

UK PM Boris Johnson suggests the use of lateral flow tests could help reopen those businesses that have been “the toughest nuts to crack”. The news also mentions the Tory leader’s hints of this lockdown to be the last at the same time warning “cautious easing.”

The Guardian news says that “The UK will look at making excess doses of coronavirus vaccinations available to other nations after it has vaccinated its adult population, vaccine deployment minister Nadhim Zahawi said on Monday.” This adds to the strength of the pound.

The UK Finance Minister Rishi Sunak need to announce big tax hikes to the tune of extra 60 billion pounds ($83 billion) in order to aid the COVID-19 hit to the public finances, the Institute for Fiscal Studies (IFS), Britain’s leading independent microeconomic research institute, as noted in its latest study. Elsewhere, the British think tank added that Sunak’s March 3 budget is too soon for such a move.

IFS Director Paul Johnson said: “For now, Mr. Sunak needs to focus on support and recovery. A reckoning in the form of big future tax rises is highly likely, but not as yet inevitable.” “But there is tremendous uncertainty around this figure: borrowing would fall to pre-pandemic levels of around 50 billion pounds under Citi’s much more optimistic scenario and would remain at around 190 billion pounds under their more pessimistic scenario,” the IFS said.

The IFS said that “But there is tremendous uncertainty around this figure: borrowing would fall to pre-pandemic levels of around 50 billion pounds under Citi’s much more optimistic scenario and would remain at around 190 billion pounds under their more pessimistic scenario.”

GBP/USD 4 Hour Chart:

Support: 1.3857 (S1), 1.3814 (S2), 1.3783 (S3).

Resistance: 1.3931 (R1), 1.3962 (R2), 1.4005 (R3).

Amidst all the catalysts favoring the pound, we expect a bullish trend for GBP/USD.