Pound Climbs On Vaccine Optimism

The pound spiked up against its major counterparts in the European session on Tuesday, as hopes for a breakthrough in the coronavirus vaccine underpinned sentiment.

Drugmaker Pfizer reported that its Covid-19 vaccine was found to be over 90% effective in preventing Covid-19 in a large-scale clinical trial.

The vaccine hopes revived investor appetite and helped offset concerns over rising coronavirus cases in the US and Europe.

Brexit trade talks remained on focus after Prime Minister Boris Johnson suffered a crushing defeat in the House of Lords over his plans to breach international law on Brexit.

Data from the Office for National Statistics showed that the UK unemployment rate increased in the third quarter and redundancies reached a record high.

The ILO jobless rate rose by 0.7 percentage points from the previous quarter to 4.8 percent in three months to September, as economists' expected.

The employment rate dropped by 0.6 percent from the preceding quarter to 75.3 percent.

The pound appreciated to 139.74 against the yen, its strongest level since September 8. The pound is seen locating resistance around the 141.00 level.

Survey data from the Cabinet Office showed that a measure of the public assessment of the Japanese economy increased further in October.

The current conditions index of the Economy Watchers' Survey, which measures the current situation of the economy, increased to 54.5 in October from 49.3 in September. Economists had forecast a score of 57.6.

The pound rallied to more than a 2-month high of 1.3272 against the greenback from Monday's closing value of 1.3163. Next immediate resistance for the pound is likely seen around the 1.34 level.

The U.K. currency firmed to more than a 2-month high of 1.2160 against the franc, up from yesterday's closing quote of 1.2011. Further rally in the pound is likely to test resistance around the 1.24 region.

The pound rose to 0.8884 against the euro, to its highest level in more than two months. If the pound rises further, 0.86 is seen as its next resistance level.

Survey data from the ZEW - Leibniz Centre for European Economic Research showed that German economic confidence deteriorated sharply to a seven-month low in November as financial experts were concerned about the economic impact of the second wave of Covid-19.

The ZEW Indicator of Economic Sentiment plummeted more-than-expected 17.1 to 39.0 points in November from 56.1 in October. The score was forecast to fall to 41.7. This was the lowest since last April.

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