The Euro to Pound (GBP/EUR) exchange rate fell today as Eurozone industrial production fell below forecasts.
At the time of writing the pair are currently trading at around £0.8724.
Euro (EUR) Falls as Eurozone Industrial Production Dented
The Euro struggled against the Pound today as industrial production fell across the Eurozone in December.
Industrial production dropped 1.6% from November, however the dent in production didn’t slow growth too much.
Chief Eurozone Economist at Pantheon Macroeconomics, Claus Vistesen, said:
‘The setback in December didn’t dent the Q4 performance much. The rebound will lose momentum in Q1 but the surveys suggest that there is plenty left in the tank for a continued rebound.’
The Euro also struggled today as risk-on trade increases and drags down demand for the single currency.
Investors continue to buy into riskier currencies as the global coronavirus situation is on a more positive footing, as cases fall and vaccine rollouts begins, adding to hopes economic recovery is imminent.
The Euro is also struggling as the United States move closer to passing the proposed $1.9 trillion fiscal stimulus package.
The move could boost the market mood and weaken the demand for safe-haven currencies like EUR.
Pound (GBP) Bolstered by Successful Vaccination Drive
The Pound has found itself gaining today as the UK Government met its target of vaccinating 15 million people by the 15th of February, today.
As a result of the target being met, investors are optimistic that the UK will be able to start easing some lockdown restrictions as early as next week when the Prime Minister Boris Johnson sets out his ‘roadmap.’
Boris Johnson spoke on the easing of restrictions today, saying:
‘No decisions have been taken on that sort of detail yet, though clearly schools on 8 March has for a long time been a priority of the Government.’
‘So we’ve got to be very prudent and what we wanted to see is progress that is cautious but irreversible and I think that’s what the public and people up and down the country will want to see.’
Euro to Pound Outlook: Eurozone GDP in Focus
Euro to Pound exchange rate movement will continue to be influenced by any coronavirus developments, with any indication that the UK will begin to move out of its lockdown restrictions proving positive for Sterling.
Euro traders will also be awaiting tomorrow’s release of the Eurozone’s preliminary GDP Data for the end of 2020.
If this confirms negative levels of growth in the Eurozone’s economy in the last quarter of 2020, then the single currency will suffer, with a double-dip recession now expected, investors will remain cautious.
Pound investors will be looking towards the UK’s Inflation Data release in the middle of the week which is expected to show a slowdown in growth, which could be negative for GBP.