EUR/GBP Exchange Rate as Outlook Improves for UK
The Euro to Pound exchange rate dipped today, with the pairing currently fluctuating around £0.86.
Sterling rose against the single currency today after Prime Minister Boris Johnson announced his Covid-19 lockdown exit strategy.
Schools will still open from 8th March supported by twice-a-week testing.
Johnson said:
‘Students on university courses requiring practical teaching, specialist facilities and on-site assessments will also return. But all others will need to continue learning online, and we will review the options for when they can return by the end of the Easter holidays.’
As a result, GBP investors are more optimistic about the outlook for the UK economy now that there is a definitive plan for easing lockdown restrictions in the months ahead.
Today also saw reports that the Pfizer and AstraZeneca jab had proven to reduce hospital admissions by over 85% and 94% respectively.
Consequently, this has also uplifted confidence in the UK economy now that over a quarter of adults have received the first dose of the coronavirus vaccine.
Euro (EUR) Dips Despite Upbeat German Business Climate Report
The Euro fell today despite today’s publication of Germany’s IFO Business Climate report, which beat forecasts and rose to 92.4.
Ifo economist Klaus Wohlrabe was upbeat, commenting:
‘The German economy is looking towards recovery again.’
However, extended lockdown restrictions in Germany have weakened confidence in the Eurozone’s largest economy.
Analysts at Reuters commented:
‘Chancellor Angela Merkel and state premiers have agreed to extend restrictions to curb the spread of the coronavirus until March 7. She told a party meeting that she wants a staggered plan to lift restrictions, according to two participants.’
However, the EU’s delay in rolling out Covid-19 vaccines has hampered confidence in the Eurozone’s economic recovery.
Consequently, the EUR/GBP exchange rate is subdued, with investors becoming concerned that the outlook for the Eurozone’s economy remains relatively uncertain.
EUR/GBP Exchange Rate Forecast: UK Unemployment Data in Focus
Euro traders will be awaiting tomorrow’s release of the Eurozone’s latest inflation report for January.
If this points to a rocky road ahead for the Eurozone economy, then the EUR/GBP exchange rate would fall.
Pound investors will be awaiting tomorrow’s release of the UK ILO Unemployment rate data.
Any signs of rising joblessness in the UK would, however, prove GBP-negative.
The EUR/GBP exchange rate could remain subdued this week, however, with the outlook for the Eurozone’s economy remaining generally uncertain following the EU’s delayed Covid-19 vaccine rollout.