GBP Trading Higher on Monday as the UK is Set to Approve Covid Vaccine
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- Hopes for a Brexit deal are still alive
- Vaccine administration poses logistical issues
The Great British pound is trading higher at the start of the week as the UK currency began with early gains across the board in the Asian session. The GBP/USD pair opened at 1.33311 and briefly dipped to a low of 1.3305. The Cable is currently hovering around 1.3345 as market participants are already into the European session on Monday.
The focus today remains on the Brexit negotiations with hopes still alive as the market is optimistic that a deal will be reached. Additionally, according to UK officials, the United Kingdom is expected to approve the Covid-19 vaccine by Pfizer and BioNTech within days, making it available for administration as early as December 7.
The UK’s Medicines and Healthcare Products Regulatory Agency has the authority to temporarily approve products for use in cases of public needs while bypassing the European Medicines Agency, which would require longer approval periods. The UK has ordered 40m doses of the Pfizer-BioNTech vaccine, which has an efficacy rate of over 95% in preventing the disease.
Delivering Vaccines in the UK and the US
In comparison, on the other end of the Atlantic, the US could approve a Covid vaccine as early as Dec 8-10 with shipments across the country expected to start at an accelerated pace just a few hours after approval.
The deliveries of a Pfizer-BioNTech vaccine, however, will pose transportation challenges as it must be stored at around -70C and remains effective for a maximum of 5 days. The UK government has stated that it would distribute the vaccine in a carefully coordinated approach through a network of GPs, NHS hospitals, and dedicated sites. The first to receive the jab, according to the Joint Committee on Vaccination and Immunisation, will be care home residents and staff, followed by elderly that over 80 years of age and general health professionals.
On the last day of November, the UK government will publish impact assessments on the new tier system that is expected to follow after the current lockdown ends on Wednesday, Dec 2. The new restriction tiers, which will be tighter than the previous ones, will have to pass the House of Commons vote on Tuesday, Dec 1. Prime Minister Boris Johnson will have the difficult task of persuading his Conservative party to vote for his tier system plan which will keep most of England under strict pandemic controls for December before loosening the rules in time for Christmas.
According to research by Imperial College of London and Ipsos MORI UK Ltd, UK infections have dropped by 30% during the November lockdown.
On the Brexit Front
The two sides are now entering what could be their final week. The UK government still hasn’t bridged the gap on the issue of fisheries. Meanwhile, the EU’s lead negotiator, Michel Barnier, has proposed that the UK receives a 15% to 18% share of fishing rights, a proposal dismissed by Downing Street as “risible”. According to an estimation by Brussels, the worth of fishing rights is valued at around
650 million euros. David Frost, the leading UK negotiator, has aimed at an 80% share for the UK. Mr. Frost said on Twitter on Friday that “for a deal to be possible, it must fully respect UK sovereignty”.