The GBP/EUR exchange rate has been supported this morning from both the hope that new US President Joe Biden’s $1.9TRN stimulus package will be passed in congress and the UK vaccine rollout.
The pair is currently trading at around 1.1322.
Pound (GBP) Gains on Back of Stimulus Speculation
The Pound has been buoyed through this morning’s session as US President Joe Biden’s first day in office brought speculation from markets about whether his near $2TRN proposed stimulus package will be passed and rolled out across America.
Furthermore, the Pound continues to be supported by the UK vaccine rollout to combat the coronavirus pandemic.
The UK had administered 346,922 new doses in the 24 hours leading up to Wednesday afternoon.
Figures show that 350,000 people must receive their first jabs per day if meeting the mid-February target set by the Government for the most vulnerable of the population to be vaccinated.
Yesterday evening also saw comments from Bank of England (BoE) Governor Andrew Bailey who was optimistic about the UK’s economic recovery, saying:
‘I really do think that we are going to see a pronounced recovery in the economy as the vaccination programme, as it is doing now, rolls out.’
Euro (EUR) Struggles as Coronavirus Fears Remain Rife
The Euro was on the back foot this morning as coronavirus concerns continue to plague the bloc.
Germany has extended its lockdown with Denmark and the Netherlands expected to also implement measures further as new variants of the virus run rampant.
The Eurozone also continues to struggle against the UK’s vaccination rollout, with European Commission vice-president Margaritis Schinas saying:
‘[It’s] not a race between countries but a race against time.’
Pound Euro Exchange Rate Outlook: PMI’s to Push Sterling Higher?
Euro investors will look to the ECB’s January policy decision this afternoon, with the bank expected to keep its current dovish tone.
This could lower market appetite for the shared currency which could push down sentiment for the Euro even more, furthermore investors will be looking to tomorrows Eurozone PMI’s.
Pound investors will be keeping an eye on any further coronavirus developments as the national lockdown continues, if infections continue to fall and vaccinations rise, Sterling is expected to benefit and be pushed higher.
Furthermore, Pound traders will also be looking towards tomorrows PMI projections which could be influential on the GBP/EUR exchange rate, pushing the pairing higher if forecasts are matched or beaten.
Though it’s expected that the UK’s service PMI is likely to be in contraction again, which could damage GBP and indicate a negative growth for the start of 2021.