GBP/EUR Exchange Rate Edges Higher as Home Secretary Eases Fears of Further Lockdown Restrictions
The Pound to Euro (GBP/EUR) exchange rate rose by 0.2% this morning, with the pairing currently trading around €1.122.
Sterling rose today after UK Home Secretary Priti Patel said that Covid-19 lockdown rules were ‘tough enough’ without any further need for crackdowns or added restrictions.
As a result, UK markets have heaved a sigh of relief. Yesterday saw GBP investors becoming increasingly jittery over the possibility of further lockdown rules.
However, Patel’s statement has effectively eased growing expectations that Downing Street would announce stricter restrictions.
In UK economic news, Pound investors are becoming more hopeful that the retail sector could be on the mend after the online fashion chain, ASOS, sales were reported to have surged during lockdown.
ASOS reported that UK sales had surged over 36% over the past four months of 2020, with the company’s CEO, Nick Beighton, commenting:
‘Looking forward, given the uncertainty associated with the virus and the impact on customers’ lives, our cautious outlook for the second half of the year remains unchanged.
‘However, the strength of our performance gives us confidence in our continued progress towards capturing the global opportunity ahead.’
Euro (EUR) Falls Despite ECB Confirming Forecasts for the Eurozone’s Economy
The Euro fell today despite the President of the European Central Bank (ECB), Christine Lagarde, confirming that the bank’s forecast of an economic rebound this year still stands.
‘I think our last projections in December are still very clearly plausible. Our forecast is predicated on lockdown measures until the end of the first quarter.’
In Eurozone economic news, today saw the release of the latest Industrial Production data for November.
With the figure beating forecasts and rising by 2.5%, the outlook for the Eurozone’s economy is steadily improving.
‘In the euro area in November 2020, compared with October 2020, production of capital goods rose by 7.0% and intermediate goods by 1.5%, while production of durable consumer goods fell by 1.2%, non-durable consumer goods by 1.7% and energy by 3.9%.
‘In the EU, production of capital goods rose by 6.1% and intermediate goods by 1.4%, while production of durable consumer goods and non-durable consumer goods fell by 1.1% and energy by 2.9%.’
However, with rising Covid-19 cases throughout Europe and further travel restrictions, EUR investors are remaining largely cautious.
GBP/EUR Outlook: Could UK Covid-19 Vaccine Progress Boost Sterling This Week?
The Euro (EUR) will continue to be driven by the Eurozone’s Covid-19 situation this week.
Any further signs of rising Covid-19 cases could weigh on the EUR/GBP exchange rate as concerns grow over the Eurozone’s economic recovery later this year.
In Eurozone economic news, tomorrow will see the publication of Germany’s Real GDP Growth Data.
If the outlook for the German economy – the largest in the Eurozone improves – we would see the Euro rise.
The GBP/EUR exchange rate could edge higher this week if the UK’s Covid-19 vaccine programme shows any clear progress towards the Government’s mid-February goal.