The market is hopeful that the UK economy will have a swifter rebound this year as the government continues its vaccine rollout
The GBP/USD price is up for the third straight day as US Treasury yields fall and as forex investors raise bets of a strong UK recovery. It is trading at 1.3845, which is 1.35% above the lowest level this week.
The market is hopeful that the UK economy will have a swifter rebound this year as the government continues its vaccine rollout. It has already vaccinated more than 30 million people, almost half the population. It also expects to continue the process, with the goal of vaccinating all people in the next few months.
The impact of this trend is being seen in the numbers. On Thursday, numbers by Markit revealed that the manufacturing sector continued to expand in March. The manufacturing PMI increased from 55.1 to 58.9 in March. This was better figure than the median estimate of 57.9.
It was also the fastest growth since 2011. While the UK manufacturing sector is a relatively small one, it helps to support the large services sector.
Other countries in Europe, Asia, and North America also recorded a stronger bounce back. Indeed, the JP Morgan global manufacturing PMI number increased to a ten-year high of 55. This growth was supported by stronger output, new orders, and employment.
The GBP/USD also rallied because of the overall weaker dollar. The dollar index has fallen for the past three days in a row as the market digests the latest $2.3 trillion infrastructure package proposal and the dropping US Treasury yields. The 10-year Treasury yield has fallen from the 16-month high of 1.74% to 1.67%. The 10-year yield has also dropped to 2.334%.