Forex: How pound has fared over the year

[OZER]

The first day of 2021 marked not only the start of the new year but the beginning of a new journey for Britain as it left the European Union.

The pound started the year against the dollar (GBPUSD=X) at $1.3625, and at €1.1041 against the euro (GBPEUR=X). It has since had a rollercoaster journey, battling lockdowns, COVID restrictions, rising inflation, and record low interest rates.

In January, the currency suffered slightly against the dollar as England entered its third national lockdown, which lasted until the middle of February, due to rising cases of coronavirus.

UK prime minister Boris Johnson told people at the time to remain and work from home, while non-essential retailers stayed closed, along with primary and secondary schools across the country.

The pound had initially benefited in the wake of the UK striking a trade deal with the EU on Christmas Eve 2020, after a painstakingly long negotiating period. However, investor focus quickly shifted from Brexit to the pandemic and the economic backdrop.

A few weeks later it reached a fresh three-year high against the dollar, trading at $1.3758 thanks to vaccine rollout optimism. This was sterling's strongest level since May 2018. It was also up against the euro at €1.1312.

The currency was helped by Britain leading the continent's vaccination race, after becoming the first country to approve the Pfizer (PFE) jab.

February bought better luck for the pound, which continued its climb and soared to a 33-month high, breaching $1.39 for the first time since April 2018. News of the UK inoculating 15 million people in the top four priority groups by 15 February came as a welcome boost.

Days later it hit $1.40, shrugging off disappointing UK data amid a wave of vaccine optimism and hopes of eased lockdown restrictions in the country. But it was not as buoyant against the euro, retreating from 11-month-plus high in the middle of the month to fall slightly.

Over the next two months the pound was under pressure as traders turned to safer assets such as the dollar amid a sell-off across global markets. It came after a sharp spike in bond yields, with investors adopting a risk-off approach.

Markets were also hedging the risk of an earlier rate hike from the US Federal Reserve at the time, despite officials vowing earlier in the week that any move was long in the future.

With equities on the back foot the US dollar continued its positive run, rising to its highest level since the beginning of December 2020.

Read more: Investing: New Year's portfolio resolutions

However, April to May saw the pound steam ahead against a basket of currencies as the UK economy started to open under the PM's roadmap out of lockdown.

People in England were 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, and later were able to dine and mix indoors. Limited international travel also resumed.

By 21 May, sterling was trading higher against the greenback at $1.4211, on track for its third consecutive week of gains against the currency, while it was at €1.1630 against the euro. The dollar was held back by expectations that America will continue to stimulate its economy through loose monetary policy and high government spending.

After hitting its highest level of the year on 28 May ($1.4171) things have been downhill for the pound for the second half of 2021, as the dollar continued to strengthen. It has, however, managed to remain bound between €1.15 and €1.19.

full article: https://uk.finance.yahoo.com/news/forex-2021-how-pound-sterling-currency-has-fared-over-the-year-000125432.html

[rahar]

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[SmitFish]

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[conveyance]

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[M_ES_silva]

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[jakeydave]

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[masterogel2]

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[Tuxx]

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[salisbury]

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[furman]

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[lau]

 Kathua helicopter crash: Search for two missing n Army pilots continues

[sphenoid]

booster shots are inflationary. Who's paying for tests and vaccines? Your purchasing power. When government interferes with the working class and businesses through more and more regulation, does that increase output or decrease output? It decreases output causing higher prices for goods and services. Bill Gates' carbon tax to fund his chalk marks in the sky. Is that carbon tax inflationary or deflationary? It's inflationary. There is zero benefit to the middle class by flying airplanes spraying dust into the atmosphere. The entire process is inflationary.

[supergrilygamer]

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[Hobojimmy]

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