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Pound Euro Exchange Rate Rises: GBP Strengthens on UK Economic Optimism

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GBP/EUR Exchange Rate Edges Higher as UK Covid-19 Hospitalisations Continue to Fall

The Pound Euro exchange rate rose by 0.2% today as UK hospitalisations because of Covid-19 continue to drop, with today’s figure down by -686 versus last week. The pairing is currently trading around €1.15.

As a result, the Pound (GBP) has benefited from growing UK economic optimism, as coronavirus infections continue to show signs of easing across much of the nation.

However, reports about a ‘fear of the office’ have now emerged, with Canada Life reporting that those who have previously suffered from Covid-19 are more reluctant to return.

Dan Crook, Protection Sales Director, Canada Life, commented:

‘Ultimately, it’s going to be very hard for employers to please everyone. In reality, the return to the office should be a phased approach which is sensitive to the needs of employees.

‘Plans should be flexible as they are likely to evolve over time.’

The UK economy has shown signs of picking up steam, however, with hiring restarting after the Government loosened lockdown rules.

Fabrice Montagne, chief UK economist, was more cautious, commenting:

‘The third lockdown has actually been much less disruptive than we’d thought. Hence the bounce will be automatically smaller. Sentiment is strong. The recovery will still happen, but in a more civilized way than pictured by Andy ‘Mr. Boom’ Haldane.’

The UK economy is expected to expand by 5.5% in the second quarter and 3% in the third quarter after contracting by -2.2% in the first quarter of this year.

Euro (EUR) Struggles as the Eurozone Suffers from a Third-Wave of Covid-19

The Euro (EUR) has continued to suffer after Europe’s Covid-19 death toll passed 1-million last week.

However, Pfizer CEO Albert Bourla has commended the European Union’s (EU) Covid-19 vaccine rollout, saying that it was ‘working like a well-oiled machine’.

Mr Bourla said:

‘If you see the data for Europe, I think it’s not behind other major complex countries. Supplying and administering doses for 447 million people, the EU population in 27 member states, is a monumental task.’

In Eurozone economic news, today saw the publication of the latest Eurozone Construction Output figure for February.

The month-on-month figure fell below forecasts from 0.8% to -2.1%, leaving EUR investors concerned about the outlook for the bloc’s economy.

As a result, the EUR/GBP exchange rate has suffered as Europe struggles with a third-wave of Covid-19 infections.

Pound Euro (GBP/EUR) Exchange Rate Forecast:

Pound (GBP) traders will be awaiting tomorrow’s release of the latest UK ILO Unemployment Rate report for February.

Any indications of falling levels of joblessness in the UK would further boost the Pound Euro exchange rate.

Euro (EUR) investors will be awaiting tomorrow’s European Central Bank (ECB) Lending Survey.

If this shows that the Eurozone’s economic situation is worsening, however, then the EUR/GBP exchange rate would suffer.