US vaccination achieves the goal ahead of schedule, and GBP continues the mid-term uptrend given promising economic data
• USD up against JPY and EUR as vaccination progress ahead of schedule
• US consumer spending temporarily fell before stimulus paychecks
• GBP sharply higher last Friday given promising retail sales data
USD was up on Monday morning in Asia, near record gains against JPY and EUR. This is primarily due to the strengthening outlook on the US economy and the accelerated pace on vaccination rollout. Government has doubled its goal after meeting the promised 100 million shots more than one month ahead of schedule. Based on estimates from Morgan Stanley, about 75% of the population who are older than 12 will be vaccinated by the end of summer. In stark contrast, Eurozone is currently plagued by supply issues and safety concerns over the vaccines. This week we may closely watch the US jobless claims data, which fell to one-year low last week. Moreover, markets are also eyeing on Biden’s infrastructure spending plan, and more details will be shared on this Wednesday.
US consumer spending, however, fell ahead of the stimulus checks. The drop of 1.0% was the heaviest in the past 10 months, versus the forecast of -0.7%. Moreover, personal income also dropped by 7.1%. These declines were potentially due to the fading effects on lower income households from the previous round of the stimulus checks. As the fresh round of checks is being sent out, the government has also extended the unemployment benefits to early September.
GBP was slightly lower on Monday morning, but it was sharply higher against USD on Friday amid promising retail sales data. Last month UK retail sales grew by 2.1% compared with the steep drop at the start of 2021. Non-essential stores will reopen in England on April 12th and this may further help drive the growth in sales. In vaccination, by today the UK has more than 30 million adults have taken at least one shot, and this is more half of its adult population.