The fall in the oil price pulls the FTSE 100 index and the Pound
The British currency (GBP) fell in price against the US Dollar (USD) to the support of 1.3760. Traders have so far ignored the easing of restrictions in the UK and higher vaccination rates compared to the European Union. The fall in oil prices is likely to put pressure on the national FTSE 100 index, which, in turn, will cause a new fall in the Pound. On Monday, the second phase of the removal of coronavirus restrictions in the UK began. The next phase of easing the quarantine is scheduled for April 12. In the coming months, retail sales in the country are expected to recover and, as a result, the economy will grow due to pent-up demand. Against this background, the British Pound may rise against the Euro (EUR), but it is unlikely to gain an advantage over the US dollar (USD).
Gertjan Vliege, a spokesman for the Bank of England's monetary policy committee, said on Monday that he does not expect significant changes in the regulator's approach in the near future. Vliege noted that he sees some strengthening of growth this year, which, however, will not be enough to conclude that the economy no longer needs support from monetary policy. The Bank of England has pledged not to cut the rate for six months, but market participants expect possible changes in the second half of the year if inflation in the country continues to stagnate. The GBP is no longer the favorite in the pair against the dollar, but a more serious fundamental impulse is needed for a further fall.
In my trading forecast, I expect a decline in the GBP/USD exchange rate to the price value of 1.3700.