GBP reached its highest level for more than a year this morning against the euro, following positive business confidence data yesterday from the UK’s service companies.
This was in spite of a speech later in the day from Bank of England governor Andrew Bailey, who warned that while there was light at the end of the tunnel for the pandemic and its effect on the economy, risks remain “on balance distributed on the downside.”
He also said that interest rates would remain low “until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably”.
The dollar also had a good day, with US Treasury Secretary Janet Yellen saying that the $1.9trillion stimulus bill is likely to bring forth a strong recovery.
In the EU, disappointing industrial and pandemic data continue to weigh heavily on the single currency.
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