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GBP/EUR Exchange Rate Edges Higher as UK Hits 15-Million Vaccination Target

Euro Currency Forecast

Pound Rises on Covid-19 Vaccine Optimism

The Pound to Euro exchange rate rose by 0.2% today, with the pairing currently fluctuating around €1.14.

Sterling rose against many of its peers today after the UK Government met its mid-February target of vaccinating 15-million people. As a result, Covid-19 vaccine optimism has boosted confidence in the UK’s economy in the months ahead.

Nick Cawley, analyst and strategist at DailyFX, was confident about the UK having escaped a double-dip recession, adding:

‘The impressive pace of this program should allow UK PM Boris Johnson to release the country from lockdown sooner rather than later and get the economy moving.’

So far, 22.5% of the UK population have received the first dose of the coronavirus vaccine. Meanwhile, daily cases of the virus are 10,972, that’s -4,873 down from versus last week.

Consequently, GBP investors are more hopeful that the UK Government’s rapid vaccine programme could help the nation’s economy reopen in the coming months.

In UK economic data, today saw the release of February’s Rightmove House Price Index, which rose from -0.9% to 0.5%.

Analysts at Reuters said:

‘Asking prices for homes in Britain unexpectedly rose in January and early February as buyers kept on looking for properties despite probably being too late to benefit from a soon-to-expire tax incentive.’

Euro Struggles as Risk-On Market Mood Drags Down Demand for Safe-Haven Currencies

The Euro struggled to gain against Sterling today as positive risk tone has dragged on demand for the safe-haven single currency.

Instead, investors are seeking out riskier assets as global Covid-19 infections continue to fall, buoying hopes of an economic recovery.

Also weighing on demand for the Euro is hopes that the United States could succeed with its proposed $1.9 trillion fiscal stimulus package.

As a result, this would further boost market mood and weaken demand for safe-haven currencies.

In Eurozone economic data, today will see the latest publication of December’s Industrial Production data.

Any improvement in the outlook for Eurozone’s industrial orders would boost the EUR/GBP exchange rate.

EUR traders are more hopeful for Italy, however, after former head of the European Central Bank (ECB), Mario Draghi, has been sworn-in as Italy’s next Prime Minister.

Prime Minister Matteo Renzi told the BBC last week:

‘Mario Draghi was the Italian who saved Europe, and I think now he is the European who can save Italy.’

Any further signs of political stability in Italy this week would be EUR-positive.

Forecast: Could Weak Eurozone GDP Data Drag Down the Single Currency This Week?

Euro traders will be awaiting tomorrow’s release of the Eurozone’s preliminary Gross Domestic Product data for the fourth quarter.

If this confirms negative levels of growth in the Eurozone’s economy in the last quarter of 2020, then the single currency will suffer.

Tomorrow will also see the release of the Eurozone’s ZEW Survey of Economic Sentiment for February. Any improvement would provide a boost for the Euro.

The GBP/EUR exchange rate could continue head higher this week, however, as the UK races ahead with its Covid-19 vaccination programme.

As a result, the outlook for the UK’s economy is likely to improve as more and more people received their first vaccine against Covid-19.