The UK has come a long way since the first vaccines were approved on the 2nd December 2020. Since then, over 300 million doses of the coronavirus vaccines have been administered across more than 100 countries globally.
The world’s return to normality, as well as the nations’ economic recovery, are reliant upon a successful rollout of the vaccine worldwide. It therefore goes without saying that hopes and fears are high, with so much resting upon the inoculation programme. But with the recent news that all adults in the UK could receive their first dose of one of the coronavirus vaccines by June, there appears to be good reason to be hopeful about a return to normality and the growth of the economy.
The Vaccine Programme – Ahead of Schedule
This month the UK is averaging just under 400,000 doses of the vaccines delivered per day. Earlier this year, the Prime Minister announced that everyone in the UK would have received their first vaccination by mid-July. The Office for Budget Responsibility has boldly amended this prediction presenting an attractive scenario, that:
“If the rollout speed increased further to 4 million a week from March onwards, all adults could receive their first dose by June.”
Given the current weekly figures, this would seem like a realistic target for the programme, providing it doesn’t encounter any detrimental set-backs, such as a break-out of a new strain of the virus. However, hopes are high as the UK is now following the government’s roadmap plan towards a complete abandonment of all restrictions by June.
NHS England have announced that more than 20 million people have received, at least, their first dose of the vaccine since the programme began in December, although there are national discrepancies. London is currently trailing behind other regions in England for those over 70 years old.
However, the hope is that the UK will only continue to pick up momentum when it comes to vaccine administration, as it expects the supply of vaccines to increase this month when more Pfizer doses become available. Supplies of a third vaccine made by the US company Moderna, are also expected to be made available later next month.
How is the Vaccination Campaign Affecting the Value of the Pound?
At the time of writing, the pound had risen above $1.39, with the vaccination programme providing hope for early economic recovery in 2021. Last month, sterling surpassed $1.40, which is the highest level that it’s reached in nearly three years. Based on the success of the vaccine rollout, the prospect of economic recovery and market analysis, experts expect that the pound could reach $1.50 by the end of this year.
The foreign exchange is the largest market in the world and is highly susceptible to change, being closely influenced by political, social and economic developments. Currencies are a useful indicator of how one country is faring internally in comparison to another. You can keep on top of the forex market’s fluctuations with online tools and indicators, as well as use contracts for difference (CFD) to participate in forex trading on Plus500, for example, an online CFD trading platform. This allows traders to speculate on the value of the currency without owning the underlying asset.
The pound’s recent surge in value has been influenced by various external factors, not just the hope given by the coronavirus vaccine. One of the most notable of these was the UK’s securement of a Brexit deal at the end of last year. This caused the sterling to increase by almost 6% against the euro, as investors were instilled with confidence that Britain was once again a viable investment.
The success of the pound can also be attributed to the dollar’s weaknesses. Kallum Pickering, Berenberg bank’s senior economist said that:
“When global markets become more bullish, they sell their dollar-denominated assets, mainly Treasuries [US government bonds], and buy non-dollar-denominated assets that are higher-risk but therefore offer higher returns.”
As a result of this, British, Asian and European markets will benefit from the dollar’s decline.
Many economist’s predictions instil a strong sense of hope for the pound and its continual recovery in 2021. The sterling’s bright future rests upon the further success of the vaccination campaign and the easing of lockdown restrictions, not only in the UK, but in other countries within the northern hemisphere too.