GBP/EUR Exchange Rate Rises as Covid-19 Vaccine Offers a ‘Route Out’ of Covid-19 Crisis
The Pound to Euro (GBP/EUR) exchange rate rose by 0.3% today, with the pairing currently trading around €1.105.
The Pound (GBP) rose this morning following the announcement that the Oxford/AstraZeneca Covid-19 vaccine had been approved for rollout by a British regulator.
GBP investors are more hopeful for the UK economy as a rapid rollout of a vaccine which requires normal refrigeration and is easy to transport will scale up vaccination throughout the nation.
UK Health Secretary Matt Hancock said that the new vaccine approval would provide a ‘route out’ of the Covid-19 crisis.
Mr Hancock told Sky News:
‘I am now, with this approval this morning, highly confident that we can get enough vulnerable people vaccinated by the spring that we can now see the route out of this pandemic.
‘It is going to be a difficult few weeks ahead. We can see the pressures right now on the NHS and it is absolutely critical that people follow the rules and do everything they can to stop the spread, particularly of the new variant of this virus that transmits so much faster.’
In UK economic data, today saw the release of December’s Nationwide Housing Prices figure beat forecasts and rise by 0.8% month-on-month.
However, a combination of positive Covid-19 vaccine news and a Brexit deal breakthrough has continued to lift the GBP/EUR exchange rate today.
Euro (EUR) Struggles as Brexit Sparks Uncertainty in Eurozone
The Euro (EUR) struggled today as the UK’s Brexit could trigger a large shift in the Eurozone’s economy and trading relations.
Alasdair Haynes, chief executive at Aquis Exchange, commented on Brexit:
‘This is a big bang event and that is one of the things that the market hasn’t truly understood yet.
‘This is literally everything moves on a specific day and we have got to pray to God that we don’t have some extraordinary event happen in the market that creates high volumes.’
Meanwhile, single currency traders are becoming more concerned for the bloc’s economy as several of its key economies – including Germany and France – continue to battle the Covid-19 pandemic.
GBP/EUR Outlook: Could the Eurozone’s Uncertain Economic Outlook Weaken the Single Currency?
The Pound (GBP) could continue to head higher this week as hopes are growing for Britain’s economy following the announcement of an Oxford/AstraZeneca Covid-19 vaccine rollout.
However, if Covid-19 cases continue to rise, threatening a possible nationwide lockdown, then we would see Sterling fall.
Meanwhile, the Euro will likely remain subdued as the outlook for the Eurozone’s economy remains largely uncertain going into 2021.