GBP/EUR Exchange Rate Edges Higher as Hopes Grow for UK Economy
The Pound to Euro (GBP/EUR) exchange rate rose by 0.2% today, with the pairing currently trading around €1.11.
Sterling rose today after UK Prime Minister Boris Johnson’s UK-EU trade deal successfully passed into UK law.
‘11pm on 31 December marks a new beginning in our country’s history and a new relationship with the EU as their biggest ally. This moment is finally upon us and now is the time to seize it.’
As a result, the Pound has benefited from a clearer path ahead for the British economy in 2021, with both Brexit and the approval of the Oxford/AstraZeneca Covid-19 vaccine.
The new Covid-19 vaccine, which will be rolled out in January, requires only average levels of refrigeration, making it much easier to transport and roll out.
Consequently, GBP investors are hopeful that the UK economy could begin to recover by spring next year.
Matt Hancock, the UK Health Secretary, was also optimistic about the new vaccine, saying:
‘It’s very good news for accelerating the vaccine rollout. It brings forward the day we can get our lives back to normal.’
‘I am now, with this approval this morning, highly confident that we can get enough vulnerable people vaccinated by the spring that we can now see the route out of this pandemic.’
Euro (EUR) Struggles as New Covid-19 Variant Spreads Throughout Europe
The Euro (EUR) struggled today after it was reported that France is planning a 6pm curfew to prevent a third wave of the coronavirus.
Meanwhile, EUR traders are remaining cautious as the new Covid-19 variant is being detected throughout many countries throughout Europe.
Ursula von der Leyen, the President of the European Commission, was however more hopeful about 2021, saying:
‘We are starting to turn the page on a difficult year. Vaccination is the lasting way out of the pandemic.’
The Euro has also stumbled owing to risk-on trade following an agreement between the EU and China on a new investment treaty.
As a result, demand for the safe-haven single currency has struggled in the past few days, with risk sentiment improving after news that the US could pass a new stimulus programme.
GBP/EUR Outlook: Could Sterling Hold Steady as Optimism Grows for UK Economy in 2021?
The Pound (GBP) will likely remain steady over the weekend as we enter 2021, with the new Covid-19 vaccine rollout and the Brexit deal passing into law has buoyed confidence in the UK economy.
Any further signs of rising Covid-19 cases throughout the UK, however, would be GBP-negative.
Meanwhile, the Euro could remain subdued as concerns grow for the Eurozone’s economy going into the new year.
The GBP/EUR exchange rate will likely perform relatively well into the first week of January, with the new Oxford/AstraZeneca promising a degree of relief for the British economy in the months ahead.