Pound Euro Refreshes One-Year High as UK Lockdown Easing Plans Still on Track

GBP Firms as UK Lockdown Easing Roadmap Still on Track, Pound Euro at One Year High

The Pound opened this week on firm footing, with the Pound Euro exchange rate holding at one-year highs.

Sterling sentiment is being bolstered by the UK government’s confidence it is still on track to ease lockdown restrictions in the coming weeks.

The government’s current roadmap will see most non-essential retail allowed to reopen from 12 April which should help to deliver a rebound in UK economic growth in the second quarter of 2021.

Looking ahead, GBP investors will be keeping a close eye on UK coronavirus statistics as they remain wary that Europe’s resurgence could still cross the Channel and disrupt the government’s plans.

GBP exchange rates are firm again this morning, with GBP/USD steady while the Pound Euro exchange rate is ticking higher, consolidating at €1.17.

Euro (EUR) Subdued as European Coronavirus Cases Continue to Rise

The Euro struggled to attract support on Monday as concerns over the ongoing rise in coronavirus cases in Europe sapped demand for the single currency.

EUR investors were particularly spooked by reports that France’s hospitals threaten to be overwhelmed by the latest resurgence, with the number of patients in ICUs close to a record high.

In the spotlight today will be Germany’s consumer price index, which could give the Euro a boost as economists forecast inflation in the Eurozone’s largest economy will have shot up from 1.3% to 1.7% this month.

US Dollar (USD) Buoyed by Cautious Trade

The US Dollar traded with modest gains yesterday, with investors favouring the safe-haven currency amidst ongoing US-China tensions and some skittish moves in the stock market following the liquidation of a hedge fund.

However, the ‘Greenback’ was unable to translate this into any breakthrough movement as USD investors remained concerned that US coronavirus cases may be on the rise again.

In the absence of notable US economic releases, any movement in the US Dollar today is likely to remain tied to market sentiment, with the currency likely to advance if the mood remains broadly cautious.

Canadian Dollar (CAD) Muted as Oil Prices Weaken

The Canadian Dollar was left mostly rangebound on Monday, with the appeal of the commodity-linked ‘Loonie’ being knocked as oil prices fell back following the news the Ever Green container ship, which had blocked the Suez Canal for almost a week, had been freed.

Australian Dollar (AUD) Dips on Coronavirus Fears

The Australian Dollar was placed on the defensive overnight on Monday as AUD investors were spooked by a small outbreak of coronavirus cases in Brisbane and concern over the impact of a three-day lockdown.

New Zealand Dollar (NZD) Undermined by Risk-Off Mood

The New Zealand Dollar also ticked lower in overnight trade, with investors shying away from the risk-sensitive currency as a cautious mood continued to prevail.

Data Releases

10:00 EUR Economic Sentiment (Mar)

13:00 EUR German Inflation (Mar)

Matthew Andrews

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