GBP USD BULLISHThe focus for GBP is likely to be firmly fixed on the coronavirus outbreak now that the UK and EU have reached a Brexit agreement.
Of course, although the market's focus on Brexit is now likely to markedly fade, it's worth noting that it will remain a key factor for the UK's economic outlook as the UK comes to terms with its new trading relationship with its largest trading partner.
Indeed, reports have noted that in the first month since the UK began its new trading relationship with the EU, exports to the continent fell by 68%.
Indeed, the impact of Brexit and the surge in coronavirus cases in the UK will notably weigh on its economic performance for the foreseeable future. Consequently, the UK's ability to contain its outbreak and minimize the economic cost will be key to GBP's fundamental outlook.
Nevertheless, with a no-deal Brexit outcome avoided, the BoE pushing back on NIRP in the immediate future and the UK's vaccine rollout progressing smoothly with 1 in 3 UK citizens having now received at least one vaccine dose, we hold a bullish fundamental outlook for GBP.
