Yahoo Movies Pound under pressure as traders turn to lower-risk assets
The pound slid to a two-week low against the dollar (GBPUSD=X) on Friday amid fears of a rise in inflation and interest rates, and a drive towards lower-risk assets.
Sterling slipped 0.54% against the dollar to $1.3821 and fell 0.21% against the euro (GBPEUR=X) to 1.1582.
The currency has been falling since Federal Reserve chair Jerome Powell shrugged off rising bond yields last night.
Traders had been hoping he would indicate that the Fed might step up purchases of long-term bonds to hold down longer-term interest rates.
With stock markets on the back foot the US dollar has also continued its recent positive run, rising to its highest level since the beginning of December.
US ten-year Treasury yields have soared above 1.55%, carrying the dollar higher.
However, the pound does remain supported by the vaccination rollout across the UK, which has seen a third of all Brits already receive the jab.
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Almost 21 million people have been vaccinated (with a first dose) so far in the UK, with the majority of over-80s receiving the jab, as well as elderly residents in care homes.
Seven mass vaccine centres have now opened in England as the government aims to offer vaccinations to 15 million people in the UK by mid-February.
Ashton Gate football stadium in Bristol, Epsom racecourse in Surrey, the Excel Centre where London's Nightingale hospital is based, Newcastle's Centre for Life, the Manchester Tennis and Football Centre, Robertson House in Stevenage and Birmingham's Millennium Point will offer vaccines to people aged 80 and older, along with health and care staff.
As part of the vaccines delivery plan, the government also hopes that all adults can be vaccinated by the autumn. It plans to have 2,700 vaccine sites across the country.
The official estimate of the R number — how many people each infected person then reinfects — is between 0.6 and 0.9 for the UK, with new infections falling by 2% to 6% per day.
On Thursday, a further 6,573 people tested positive with 242 deaths within 28 days of a positive test reported.
READ MORE: £65bn more in COVID spending and 'biggest tax cut in history' for business
Upbeat forecasts in Wednesday’s budget have also capped the pound’s losses.
The blockbuster announcement contained a raft of changes to taxes and welfare, alongside new spending announcements.
Chancellor Rishi Sunak announced what amounts to stealth tax rises on income, inheritance, capital gains, and pensions, while at the same time offering more support to low-income workers and those struggling due to COVID-19.
WATCH: Will interest rates stay low forever?
