EUR/GBP Exchange Rate Falls as Safe-Haven Demand Falls on Covid-19 Vaccine Hopes
The Euro to Pound fell by -0.4% today after Sterling received a boost on positive Covid-19 vaccine news. Pfizer, the pharmaceutical giant, said that so far vaccine trials had proven 90% successful.
The pairing is currently trading around £0.893.
Brexit news remains in focus after Prime Minister Boris Johnson’s internal market bill suffered a defeat in the House of Lords.
However, Downing Street intends to go ahead anyway, despite the setbacks.
Following the US election, in which Democrat Joe Biden secured a victory over President Donald Trump, GBP investors have become more hopeful that the UK and the EU could concede on a post-Brexit trade agreement.
As a result, UK markets are now more optimistic that we’ll see an orderly exit on at the year-end.
In UK economic data, today saw September’s UK Unemployment Rate fall to a four-year low.
Nye Cominette, a senior economist at the Resolution Foundation, was pessimistic, saying:
‘As the crisis enter its ninth month and second lockdown, job losses will continue to mount. Crucially this is much about those out of work struggling to find new roles as it is about job losses.’
Euro (EUR) Sinks as Europe’s Economic Situation Looks Bleak
The Euro (EUR) has continued to suffer today, with concerns growing over Europe’s coronavirus situation.
Consequently, EUR traders are now more concerned that the Eurozone’s economy could slide into a recession towards the end of this year.
In Eurozone economic data, today saw the release of the Eurozone’s ZEW Survey of Economic Sentiment for November, which undercut forecasts and fell to 32.8.
Achim Wambach, the ZEW President, commented on the data:
‘The ZEW Indicator of Economic Sentiment has therefore once again significantly decreased in November, indicating a slowdown of economic recovery in Germany.
‘There is also the additional worry that the German economy could head back into recession.’
Meanwhile, news of a Covid-19 vaccine has also dampened demand for the safe-haven single currency.
EUR/GBP Outlook: Could a Brexit Breakthrough see the Pound Rise?
Euro (EUR) investors will be awaiting tomorrow’s speech from Christine Lagarde, the President of the European Central Bank (ECB).
Any downbeat comments about the Eurozone’s economy, however, would prove EUR-negative.
Europe’s Covid-19 situation will also remain in focus. If the infection rate continues to edge higher, then we could see the EUR/GBP exchange rate fall.
Pound (GBP) traders will be monitoring Brexit developments. If it looks likely that the UK and the EU could agree on a post-Brexit trade agreement, then we could see Sterling head higher.