EUR/GBP Exchange Rate Rises as UK Market Mood is Weakened by Third-Wave Fears
The Euro Pound (EUR/GBP) exchange rate rose by 0.2% today, with the pairing is currently fluctuating around £1.19.
UK market mood has been dampened by growing tensions between the UK and the EU over the bloc’s threat to ban exports of the AstraZeneca coronavirus vaccine to the UK.
Prime Minister Boris Johnson is now in discussions with the EU to prevent a possible delay in the UK receiving crucial vaccines.
Mr Johnson said:
‘One thing that’s worth stressing is that, on the continent right now you can see, sadly, there is a third wave under way, and …previous experience has taught us that that when a wave hits our friends, it I’m afraid washes up on our shores as well. And I expect that we will feel those effects in due course.
‘That’s why we’re getting on with our vaccination programme as fast as we can.’
As a result, GBP investors are becoming more concerned that Europe’s third-wave of Covid-19 could extend to Britain in the coming months.
Euro (EUR) Edges Higher Despite Third-Wave Fears Weighing on Eurozone Market Sentiment
The Euro (EUR) rose today despite growing concerns for the Eurozone’s economy as the EU faces a third-wave of Covid-19 infections.
As a result, EUR investors are becoming more worried about the possibility of further extensions to national lockdowns. This would limit the Eurozone’s ability to recover its economy in the months ahead.
German Health Minister Jens Spahn commented:
‘The numbers are rising, the share of mutations is large and there are some fairly challenging weeks ahead of us.’
Today also saw the European Central Bank’s (ECB) President, Christine Lagarde, warn about the European Union’s slow rollout of Covid-19 vaccinations.
‘The near-term economic outlook is subject to uncertainty, relating in particular to the dynamics of the pandemic and the speed of vaccination campaigns.’
‘We therefore stand ready to adjust all of our instruments, as appropriate, to ensure that inflation moves towards our aim in a sustained manner, in line with our commitment to symmetry.’
EUR/GBP Forecast: Could Rising Cases of Coronavirus Cases in Euro Weaken the Single Currency?
Pound (GBP) investors are looking ahead to tomorrow’s release of the UK ILO Unemployment Rate figure.
Any signs of rising unemployment in Britain would drag down the GBP/EUR exchange rate.
Tomorrow will also see a speech from the BoE’s Governor Andrew Bailey.
If he is notably upbeat in his statements about the UK economy in the coming months, then the EUR/GBP exchange rate would suffer.
The Euro Pound (EUR/GBP) exchange rate could fall this week if the EU continues to see a rising number of coronavirus cases.