GBP/EUR Exchange Rate Edges Higher: Pound Benefits from UK’s Vaccination Rollout
The Pound Euro (GBP/EUR) exchange rate rose by 0.3% this morning. UK markets are becoming more optimistic about the outlook for the economy, with this year expected to see rapid growth. The pairing is currently fluctuating around €1.15.
Sterling has benefited from increasing confidence in the UK economy thanks to the Government’s large-scale Covid-19 vaccination rollout and recent easing of some lockdown restrictions.
Howard Archer, chief economic advisor to the EY ITEM Club, was also optimistic about the outlook for the UK economy in the next few months, saying:
‘Businesses and consumers have been innovative and flexible in adjusting to COVID-19 restrictions and, while restrictions have caused disruption, lessons learned over the last 12 months have helped minimise the economic impact.’
As a result, the Pound Euro exchange rate has risen today with hopes that the nation’s unemployment could also rise less than previously feared.
Ian Stewart, the chief economist at Deloitte, commented:
‘The UK is primed for a sharp snapback in consumer activity. High levels of saving, the successful vaccination rollout and the easing of the lockdown set the stage for a surge in spending over the coming months.’
In the absence of any notable UK economic data today, we could, however, see the GBP/EUR exchange rate continue to head higher on the rosy economic outlook for Britain for the year ahead.
Euro (EUR) Struggles as German IFO Data Falls Below Forecasts
The Euro (EUR) struggled today following the release of Germany’s latest Business Climate report for April. The figure fell below forecasts but rose to 96.8 against the previous month’s 96.6.
Germany’s IFO Expectations gauge, however, fell from 100.3 to 99.5, sparking concern about the outlook for the Eurozone’s largest economy.
Nevertheless, single currency investors are becoming more confident about Europe’s handling of the Covid-19 situation.
The European Union (EU) has now rolled out the Johnson & Johnson vaccine which will also help speed up the EU’s vaccination rollout programme in the coming months.
EUR traders will be awaiting today’s speeches from the European Central Bank’s (ECB) Fabio Panetta and Philip Richard, both members of the ECB’s executive board.
Any dovish comments about the outlook for the Eurozone’s economy would further limit the EUR/GBP exchange rate.
Pound Euro Exchange Rate Forecast: Could a Dovish ECB Drag Down the Single Currency?
Euro (EUR) investors will be awaiting tomorrow’s speech from the European Central Bank’s (ECB) President Christine Lagarde.
If Lagarde is notably dovish in her prognosis for the Eurozone’s economy, however, then the EUR/GBP exchange rate would continue to suffer.
The Pound Euro (GBP/EUR) exchange rate could continue to head higher this week, as the outlook for the UK economy is likely to remain upbeat now that the Government’s Covid-19 vaccination program progresses to 44-year-olds.