GBP/USD: Britain's reopening and calm on the vaccine front to propel sterling

GBP/USD has been under mild pressure as US yields boost the dollar. According to FXStreet’s Analyst Yohay Elam, the dollar has reasons to rise, but the UK may overcome such strength thanks to its virus/vaccine advantage.

Key quotes

“Even if the UK's immunization campaign somewhat slows down, it has reached nearly 50% of the population with at least one dose and the results are clear – cases and hospitalizations are falling. Moreover, London recorded no COVID-19 deaths on Monday – the first such feat in 2021.”

“President Joe Biden is set to unveil his infrastructure spending plan on Wednesday and he may refrain from introducing new taxes in the first phase. That implies higher debt, more bond issuance, and therefore rising returns on Uncle Sam's IOUs.” 

“The White House grand plans – which include huge wind farms and other green initiatives – may push inflation higher. If the Federal Reserve is forced to hike borrowing costs, that would also support the greenback.”

“Support awaits at 1.3740, the daily low, followed by 1.37, a round number. The March low of 1.3670 is the next cushion to watch.”

“Some resistance awaits at 1.3780, a support line from early March. It is followed by 1.3820, a separator of ranges from last week, and then by 1.3845, which worked in both directions in recent weeks.”