GBP/EUR Exchange Rate Heads Higher as UK Lockdown Roadmap ‘Remains on Track’
The Pound Euro exchange rate rose by 0.7% this morning following news that Prime Minister Boris Johnson will further ease lockdown restrictions from 17 May, despite the spread of the Indian Covid-19 variant. The pairing is currently fluctuating around €1.15.
Johnson has been confident about the roadmap, saying that it ‘remains on track’ and that the Government’s had largely been a success. He said in comments released overnight:
‘[O]ur successful vaccination programme continues – more than two-thirds of adults in the UK have now had the first vaccine – and we can now look forward to unlocking cautiously but irreversibly’.
The weekend saw the Scottish Nationalist Party fall short of an outright majority in the Scottish Parliament.
GBP are however remaining cautious after SNP leader Nicola Sturgeon warned Boris Johnson that a second independence referendum is ‘a matter of when, not if’.
But with the SNP falling short of a majority, Pound investors are now more hopeful that this could prevent a break-up of the UK.
In UK economic news, today saw the publication of the latest Halifax house prices figure for April, which beat forecasts and rose by 1.4%, growing at their fastest rate in five years.
As a result, GBP investors are becoming increasingly confident about the outlook for the UK economy this month, especially after Johnson has reiterated his promise for irreversible easing of lockdown measures over the coming months.
Euro (EUR) Struggles as Concerns Linger Over Eurozone’s Double-Dip Recession
The Euro (EUR) struggled against Sterling today despite growing confidence in the European Union’s (EU) Covid-19 vaccine rollout and easing restrictions across Europe.
However, concerns about the Eurozone’s economy have lingered this week, with worries that the bloc could struggle to emerge from a double-dip recession.
Maddalena Martini, a Milan-based economist for Oxford Economics, was more optimistic about the EU’s easing lockdown restrictions last week, however, saying:
‘[T]he gradual removal of restrictions across the economies and herd immunity reached by the summer will boost the eurozone recovery. Moreover, incoming NGEU funds will start playing a major role in the recovery profile in some countries.’
In Eurozone economic news, today will see the release of the latest Sentix investor confidence gauge for May.
If the figure confirms forecasts and rises from 13.1 to 14, then we could see the EUR/GBP exchange rate begin to claw back some of its losses as the economic outlook for the bloc improves.
GBP/EUR Exchange Rate Outlook: Could an Improvement in German Economic Sentiment Boost the Single Currency?
Euro (EUR) traders will be looking ahead to tomorrow’s release of the latest ZEW survey of German economic sentiment for May.
Any improvement in the outlook for the Eurozone’s powerhouse economy would be EUR-positive.
Pound (GBP) investors will be paying close attention to the Bank of England (BoE) Governor Andrew Bailey tomorrow.
If Mr Baily is notably bullish about the outlook for the UK economy, then the Pound Euro exchange rate will likely head higher.