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The pound is a ‘screaming buy’ if it falls to $1.30, strategist says

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Sterling notes and coins are laid out for a photo.

Matt Cardy | Getty Images

LONDON — A near-term fall in the British pound would offer investors a clear buying opportunity, according to one strategist, who said the currency was set to get a boost next year as a result of the U.K. leaving the European Union. 

Manish Singh, chief investment officer at Crossbridge Capital, said on Thursday that the “benefits from Brexit (are) going to accrue over (the) medium-term.” 

He expects the pound this year to hold at its current level against the dollar (around $1.3626 at the time of writing) or head to $1.40, “but not beyond that, and if it gets to $1.30, then it’s a screaming buy.” 

Singh told CNBC’s “Squawk Box Europe” that the pound would only move higher than the $1.40 mark next year, “on the benefits of Brexit accruing over time.” 

Britain formally left the EU trading bloc on Dec. 31, ending a year-long transition period. The pound has wavered against the dollar since Jan. 1, and is currently down around 0.3%. 

New trading arrangements between the U.K. and the EU kicked in at the start of the year, but companies have already experienced disruption in getting goods across the border, according to numerous reports

“Of course at this time, the government and everyone is fully consumed by everything that is happening on the Covid front and that has to go away, or at least thin down, before you see other policy moves,” Singh said, referring to the U.K. government rolling out more post-Brexit policies. 

In terms of the dollar, Singh said that the consensus view was that the U.S. currency would weaken this year, highlighting that some analysts expect it to plummet by as much as 20%-30%. 

Economist Stephen Roach told CNBC’s “Trading Nation” earlier this week that he foresaw “another 15% to 20% downside to the broad dollar index over the course of this year,” having predicted in June a 35% fall in the next year or two.  

Meanwhile, Standard Chartered Bank CIO Steve Brice told CNBC’s “Capital Connection” last week that the firm expected the dollar to possibly weaken between 5% to 7% over the next 12 months. 

However, Crossbridge Capital’s Singh stressed the U.S. was vaccinating against the coronavirus at a “rapid pace,” and that if the country’s gross domestic product or economic data beat expectations, the era of dollar weakness — which has been driving other currencies, including sterling, higher — could be over.

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Biden heads into inauguration with a stock market tailwind

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Biden heads into inauguration with a stock market tailwind

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Biden to deploy FEMA, National Guard to set up Covid vaccine clinics across the U.S.

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Spc. Katherine Deskins (L) of the Nevada Army National Guard administers a Moderna COVID-19 vaccination to Clark County Fire Department Capt. Jasmine Ghazinour on the first day of Clark County’s pilot vaccination program at Cashman Center on January 14, 2021 in Las Vegas, Nevada.

Ethan Miller | Getty Images

President-elect Joe Biden plans to use FEMA and the National Guard to build coronavirus vaccine clinics across the United States, according to new details of his Covid-19 vaccination plan released by his transition team on Friday.

The Biden administration will also “quickly jumpstart” efforts to make the vaccines available at local pharmacies across the U.S., which should ensure that Americans have access to doses at facilities only miles from their home, according to the plan. 

“Here’s the deal: The more people we vaccinate, the faster we do it, the sooner we can save lives and put this pandemic behind us and get back to our lives and loved ones,” Biden said at a speech in Wilmington, Delaware, Thursday night. “We won’t get out of it overnight and we can’t do it as a separated nation.”

Drug store chains and pharmacies were supposed to take on a larger role in distributing the vaccine once the government expanded access to more people. But the slower-than-expected rollout has frustrated pharmacy chains. The National Association of Chain Drug Stores called on the federal government earlier this week to allow states to send more doses directly to pharmacies as they do with hospitals and health departments. 

The group estimated that the country’s retail pharmacies could administer at least 100 million doses of vaccines each month, which would exceed the incoming administration’s promise of 100 million shots in 100 days.

The Biden administration has said current vaccination efforts are not sufficient to quickly and equitably vaccinate the vast majority of the U.S. population, adding, “We must ensure that those on the ground have what they need to get vaccinations into people’s arms.”

The pace of vaccinations in the U.S. is going much slower than officials had hoped. As of Friday at 6 a.m. ET, more than 31.1 million doses of vaccine had been distributed across the U.S., but just over 12.2 million shots have been administered, according to data compiled by the Centers for Disease Control and Prevention.

According to the plan, Biden will also invoke the Defense Production Act to “maximize the manufacture of vaccine and vaccine supplies for the country.”

The incoming president’s advisors had previously hinted that he would invoke the wartime production law, which allows the president to compel companies to prioritize manufacturing for national security, to bolster vaccine production.  

The plan says the act will increase the supply of necessary equipment that could otherwise cause bottlenecks in the vaccine’s rollout if they were in shortage, including glass vials, syringes, stoppers and needles. It will also increase the capacity to package the vaccines into vials.

This is a developing story. Please check back for updates.

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