GBP/USD: Uptrend to continue amid UK reopening expectations

GBP/USD has been extending its gains amid dollar weakness and Britain's vaccination campaign. The perfect storm has sent the cable to fresh 34-month highs, and further gains depend on these themes and on updated economic indicators and signs that the UK is beginning to open up, FXStreet’s Yohay Elam briefs. 

Key quotes

“The faster the government moves, the better for the economy and the pound. Removing restrictions is conditional on advancing rapidly in vaccination, making daily figures more important.”

“The economic calendar kicks off in earnest only Wednesday, with the publication of UK CPI figures for February. Like the US, inflation is set to remain subdued once again, allowing the Bank of England some breathing space.” 

“Retail Sales statistics for January are set to have a substantial impact. Sales have likely increased in January, partially thanks to Congress' most recent stimulus bill in late December. Any deviation from economists' estimates is set to move the greenback.”

“The Federal Reserve's meeting minutes will likely echo the Fed's pledge to keep the pedal to the metal – ongoing support to the economy until it convincingly gets out of the woods. Any hints of tapering the pace of bond-buying would boost the greenback, while some members' pressure to do more could weigh on it.”