The Euro Pound (EUR/GBP) exchange rate is heading higher today following hopes that the Eurozone’s vaccine rollout will ramp up enough to support the bloc’s economic recovery.
At the time of writing the EUR/GBP exchange rate is trading at around £0.8689 as the UK digests the recent announcement from the Bank of England (BoE) that chief economist Andy Haldane is stepping down.
Euro (EUR) Supported by Eurozone Vaccine Rollout Hopes
The Euro has been heading higher against the Pound today as hopes that the Eurozone economy could recover by the end of the year boost’s EUR.
As the Eurozone steps up its vaccine rollout across the bloc it is hoped that all adults in the Eurozone will be offered a dose of the coronavirus vaccine by the end of July, in line with the UK’s vaccine rollout expectations.
The Euro is benefitting from a weaker US Dollar today as unimpressive CPI inflation data from the US did little to support the currency.
Though the Euro has seen its gains limited against the Pound following disappointing but expected Eurozone industrial output data.
Output in the Eurozone fell 1% month on month in February and by 1.6% year on year, dampening economic growth prospects in Q1 for the bloc.
Pound (GBP) Weakens on BoE Haldane Announcement
The Pound has weakened today following the surprise announcement that the Bank of England’s (BoE) Chief Economist Andy Haldane is set to leave the bank at the end of June and coronavirus concerns creep back in.
Concerns have reignited over the discovery of a cluster of 44 cases of the South African variant of the coronavirus in the UK.
Speaking to UK television yesterday evening Professor Peter Openshaw commented on the variant:
<blockquote>‘A lot of we scientists are very concerned about what’s happening at the moment. I think we’re all just hoping that the staged reduction in lockdown is going to be ok. It is being done reasonably cautiously but I think this is not good news.’</blockquote>
Pound investors will this afternoon be looking towards a speech from the BoE policy maker Jonathan Haskel, which could shed some light on the UK’s economic recovery and Haldane’s surprise exit.
Euro Pound Exchange Rate Outlook: German Inflation in Focus
For Euro investors, tomorrow will see the publication of Germany’s inflation rate results for March, whilst the Eurozone’s overall inflation data will follow on Friday.
If the upcoming inflation data is stronger than expected, it could boost the Euro’s appeal as an indication the economy is recovering would bolster sentiment.
For Pound traders, in absence of any notable data all eyes will be on the UK’s coronavirus situation, any indication that the UK’s vaccine rollout is slowing would push Sterling down further.