Pound Climbs Amid AstraZeneca's Vaccine Approval; Parliamentary Vote Due

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The pound drifted higher against its major counterparts during the European session on Wednesday, as the authorization of AstraZeneca’s COVID-19 vaccine for emergency use in the U.K. raised hopes for a return to normalcy.

The UK Medicines and Healthcare products Regulatory Agency has approved AstraZeneca’s COVID-19 vaccine for emergency supply in the UK, with the first doses being released today. The vaccinations may begin early in the New Year.

The U.K. Parliament will vote on the trade deal agreed with the European Union on Christmas Eve.

PM Johnson has urged MPs to back the post-Brexit trade deal, which would help preserve the U.K.’s tariff- and quota-free access to the EU.

The deal is expected to be passed by both houses of the Parliament without any hurdles.

On the stimulus front, U.S. lawmakers continue to split over increased direct payments as proposed by President Donald Trump.

Senate Majority Leader Mitch McConnell on Tuesday blocked Democrats’ attempt to pass a bill granting $2000 in direct payments from $600 to most Americans.

Data from the Nationwide Building Society showed that UK house prices grew at the fastest pace in six years in December as the property market remained resilient despite the pandemic.

House prices climbed 7.3 percent year-on-year in December, following November’s 6.5 percent increase. Prices were expected to rise 6.7 percent.

The pound was higher versus the euro, at a 2-day high of 0.9013. At Tuesday’s close, the pair was valued at 0.9066. The pound is likely to face resistance around the 0.88 region, if it gains again.

The pound firmed to a 6-day high of 1.3615 against the greenback from Tuesday’s close of 1.3499. The pound may challenge resistance around the 1.43 mark.

The pound was up against the yen, at a 2-day high of 140.42. The pair had finished Tuesday’s deals at 139.81. Should the currency strengthens further, it is likely to test resistance around the 142.00 region.

After falling to 1.1921 at 5:00 pm ET, the pound moved up to a 2-day high of 1.2047 against the franc. The pound is seen finding resistance around the 1.22 mark.

An indicator of future turning points in the Swiss economy improved in December, but continued to signal subdued activity into next year in the backdrop of the coronavirus pandemic, according to a survey data by the KOF Swiss Economic Institute.

The KOF Economic Barometer rose to 104.3 from 103.7 in November. Economists had forecast a score of 100.5.

Looking ahead, U.S. pending home sales will be published in the New York session.


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