EUR/GBP Exchange Rate Sinks as BoE Predicts ‘Rapid-Fire Recovery’ of UK Economy
The Euro Pound (EUR/GBP) exchange rate fell by -0.2% today following upbeat minutes from the Bank of England (BoE), which saw an upgraded forecast for the UK’s economy. The pairing is currently fluctuating around £0.85.
The BoE’s chief economist Andy Haldane was confident about a ‘rapid-fire recovery’, saying:
‘As I’ve been saying for months – drawing on the economics of coiled springs, and crouching tigers, and ‘Chicken Lickens’ – I do think more likely than not we are [set] for a rapid-fire recovery. That is coming, and I think that is coming soon.’
As a result, the Pound Euro exchange rate rose today on a mostly upbeat statement from the BoE, which, as was widely predicted, held interest rates at 0.1%.
Nonetheless, concerns have remerged over the UK’s Covid-19 vaccination programme following news that those under 50-years-old would face a delay in receiving their vaccination.
Consequently, GBP investors are also remaining somewhat cautious about the outlook for the UK economy, with fears that Covid-19 infection rates could increase because of the delay in vaccine rollouts.
Euro (EUR) Falls on Dovish Outlook for Eurozone Economy
The Euro (EUR) fell against the Pound today as the outlook for the Eurozone’s economy appears to be increasingly grim. With the European Union (EU) facing the possibility of a third-wave of Covid-19 infections, single currency investors are becoming more cautious.
The European Central Bank’s (ECB) President, Christine Lagarde, urged Governments to get fiscal stimulus done, as the Eurozone’s economy struggles from the impact from the coronavirus pandemic.
Lagarde also commented that the outlook for the bloc’s economy had, however, shown signs of balancing.
She said:
‘The ongoing vaccination campaigns, together with the gradual relaxation of containment measures underpin the expectation of a firm rebound in economic activity in the second half of 2021.
‘There is no room for complacency.’
However, the Euro Pound (EUR/GBP exchange rate dipped today, with EUR investors remaining largely cautious as the outlook for the Eurozone’s economy remains largely uncertain.
EUR/GBP Exchange Rate Forecast: Could Improving UK Consumer Morale Boost Sterling?
Pound (GBP) traders are awaiting tomorrow’s release of the latest GfK gauge of consumer morale in March.
If this improves, however, we could see the Pound Euro (GBP/EUR) exchange rate head higher as the outlook for the UK’s economy improves.
Euro (EUR) traders will be eyeing tomorrow’s release of Germany’s PPI figure for February.
Any improvement in the outlook for the Eurozone’s powerhouse economy would drive-up the EUR/GBP exchange rate.