The Euro Pound (EUR/GBP) exchange rate is mixed this morning after the latest consumer price index from the US rose more than expected as inflation worries continue to dominate markets.
At the time of writing the EUR/GBP pairing are trading around 0.8596 as Sterling finds support in the latest lockdown easing measures across the UK.
Euro (EUR) Investors Jittery over Inflation Worries
The Euro has been mixed this morning as markets digest the latest rise in inflation in the US released yesterday afternoon.
Amid the US dollar regaining traction the Euro has suffered due to the negative correlation between the pair, as inflation worries weighs on risk appetite.
More so, the Euro could see itself suffering further this afternoon if the latest initial US jobless claims continue to show a sustained fall.
Currently limiting the Euro’s losses this morning however is the ramped up vaccination rollout across the Eurozone which hopes to offer all adults in the bloc a jab of the vaccine by the end of July.
Pound (GBP) Supported by UK Lockdown Easing
The Pound remains supported this morning as much of the UK prepares for the next stage of lockdown easing on the 17th May.
Indoor hospitality, museums and theatres can all reopen from Monday as well as groups of 30 people able to meet in an outdoor setting.
Concerns over the Indian variant of the virus don’t appear to have worried investors, however as reported by The Independent, members of the government’s scientific advisory committee, Sage, have been called to a meeting today to assess the threat of the variant.
James Naismith, an expert from Oxford University, spoke to a UK radio station this morning on the virus saying:
‘I think we should view it as a country-wide problem. It will get everywhere. We keep learning this lesson, but we know that this will be the case.
‘When we tried locally having different restrictions in different regions that didn’t really make any difference. So I don’t think thinking about a localised strategy for containment will really work.’
Euro Pound Exchange Rate Outlook: Coronavirus Developments in Focus
In absence of any notable data from both the Eurozone and the UK, investors will instead be focusing on any further coronavirus developments and the global market mood in the coming days.
Pound investors will want to make sure that nothing hampers the UK’s lockdown easing measures, and will keep an eye on any news from the government’s scientific advisory group over the Indian variant of the virus.
Euro traders will be focusing on any developments regarding the rise in inflation in the US, as markets become increasingly nervous that the rise in inflation is not as temporary as the Federal Reserve first thought.
