GBP/EUR Exchange Rate Rangebound as UK Covid-19 Vaccinations Pass Another Milestone
The Pound Euro exchange rate held steady this morning despite concerns that the European Union’s (EU) threat of an export ban on AstraZeneca vaccines to the UK. The pairing is currently trading around €1.16.
Rasmus Bech Hansen, the chief executive of Airfinity, explains:
‘Export bans are a lose-lose situation and threaten the global production scale-up.
‘A ban poses a significant risk for the UK and any potential UK retaliation on sub-ingredients would harm not only the EU and UK but the world, as it will significantly slow overall production.’
UK markets remain confident about the UK’s vaccine rollout, however, now that 41.4% of the population have now received at least one dose of a coronavirus vaccine.
UK Covid-19 figures continue to fall, with those in hospital down by -1,887 compared to last week, and daily deaths plummeting now that the most vulnerable have been vaccinated against the virus.
However, GBP investors are becoming more cautious as UK infection rates have stalled despite vaccinations.
Steven Riley, a professor of infectious disease dynamics at Imperial College London, said:
‘Because the vaccine has had a very high uptake in the age groups which are most likely to go to hospital or to die, then we would expect – even if the number of infections stayed the same – hospitalisations and deaths to fall.’
Euro (EUR) Struggles as Covid-19 Cases Continue to Rise in the European Union (EU)
The Euro (EUR) struggled this morning as Covid-19 cases continue to rise throughout the European Union (EU). Last week also saw three-quarters of European countries face a rise in coronavirus cases.
As a result, single currency traders are becoming more pessimistic about the outlook or the Eurozone’s economy.
Extended periods of lockdown would further limit the bloc’s economic recovery in the months ahead.
Euro investors will be awaiting this afternoon’s speech from the European Central Bank’s (ECB) member of the executive board Isabel Schnabel.
Any dovishness about the outlook for the Eurozone’s economy would weaken the Euro Pound (EUR/GBP) exchange rate.
Today will also see a speech from the president of the German Deutsche Bundesbank.
Again, if we see any dovish forecasts about the German economy, which is the largest in the Eurozone, then the Euro would suffer.
GBP/EUR Outlook: Could Rising Covid-19 Rates in Europe Drag Down the Single Currency?
Pound (GBP) investors will be awaiting tomorrow’s release of the latest UK ILO Unemployment Rate report for January.
Any signs of unemployment levels easing off in the UK would boost the Pound Euro (GBP/EUR) exchange rate.
Tomorrow will also see the Bank of England’s (BoE) Governor Andrew Bailey deliver a speech.
Again, if he repeats his bullish outlook for the UK economy in the months ahead, then the Pound Euro exchange rate would head higher.
The Pound Euro exchange rate could rise this week, however, as Covid-19 infection rates are expected to continue to rise throughout the European Union.