Pound Euro Exchange Rate Resilient as both Currencies Strengthen
The Pound (GBP) and Euro (EUR) are both strengthening this week, but the Pound Euro (GBP/EUR) exchange rate is climbing. The Pound remains the more appealing of the two currencies amid market hopes over Britain’s coronavirus vaccine rollout.
Sterling capitalised on Euro weakness last week, and GBP/EUR surged from the level of 1.1292 to the level of 1.1400. This was over a cent higher.
While GBP/EUR was unable to hold last week’s half-year-high of 1.1438, the pair continues to attempt advances this week as well.
GBP/EUR movement has been narrower and more volatile this week so far. Today though, GBP/EUR is attempting advance again and trends near the level of 1.1420.
Pound (GBP) Exchange Rates Attempt Advance despite UK Services Sector Concerns
The Pound once again jumped on hopes that Britain’s coronavirus vaccine programmes were ahead of those in other major economies.
This has been the primary cause of Pound strength in recent weeks. Investors continue to speculate that Britain’s economy will recover from the pandemic before other major economies do.
However, the Pound’s advances are slowing overall despite today’s jump. This is partially because of concerns that vaccines do not work as well on newer strains of the virus.
The pandemic lockdown also continues to damage the health of Britain’s key services sector. A major UK restaurant chain, Prezzo, has filed for administration today.
Euro (EUR) Exchange Rates Steady after Last Week’s Plunge
Investors have been buying the Euro again this week so far. The shared currency is recovering largely due to weakness in its rival the US Dollar (USD).
As investors sell the US Dollar from its highs, the Euro is recovering. The Euro and US Dollar often see a negative correlation so the Euro benefits from US Dollar losses.
News that the EU’s vaccine rollout could be boosted by a partnership between AstraZeneca and IDT Biologika also supported the Euro slightly.
Pound Euro (GBP/EUR) Exchange Rate Awaits Friday’s Slew of Data
Tomorrow will see the publication of German wholesale prices data from January. However, this data is unlikely to be particularly influential.
Instead, the Pound to Euro exchange rate is likely to remain focused on coronavirus news and vaccine developments for now – at least until this week’s key UK data is published on Friday.
Friday will see the publication of a lot of significant UK ecostats. This includes trade balance, business investment, production figures and GDP growth rate results from December and Q4 2020.
Of course, the biggest focus will be on the growth rate results.
If UK growth was weaker than expected towards the end of 2020, it could worsen concerns over the pandemic’s impact on UK growth.
This could cause some late-week weakness in the Pound Euro (GBP/EUR) exchange rate.