The Pound Euro (GBP/EUR) exchange rate traded in a wide range last week, even hitting a new two-month low as vaccine concerns overshadowed the latest easing of coronavirus restrictions in the UK.
What’s Been Happening: Pound Euro Fluctuates amid Vaccine Fears
The Pound opened last week’s session on strong footing, with GBP investors cheering the reopening of a large portion of the UK economy.
However, Sterling was quick to relinquish these gains, stumbling in the wake of the news that Andy Haldane, the Bank of England’s (BoE) chief economist and one of its biggest policy hawks, will be stepping down from the central bank in June.
The Pound then faced additional pressure due to concerns over the AstraZeneca vaccine, which briefly sent the GBP/EUR exchange rate to a two-month low before rebounding strongly at the end of the week in upbeat trade.
Meanwhile, the Euro’s negative correlation with the US Dollar underpinned the single currency through much of the week.
However, simultaneously eroding some of this support were concerns that Denmark’s decision to halt the use of the AstraZeneca vaccine could complicate the EU’s vaccination programme.
Three Things to Watch Out for This Week
- April PMI Releases
Likely acting as a key catalyst in the Pound Euro exchange rate this week will be April’s preliminary PMIs from both the UK and Eurozone. Will another strong expansion of the manufacturing sector help to boost the Euro or will accelerating growth in the UK’s service sector see the Pound come out on top?
- UK Jobs Report
Also influencing Sterling sentiment this week will be the latest UK jobs report. February’s release could offer some support to GBP exchange rates in the first half of the week if wage growth remains robust and unemployment continues to beat expectations.
- ECB Rate Decision
In the spotlight for EUR investors this week will be the European Central Bank’s (ECB) latest rate decision. No policy decisions are expected from the bank this month, but will Europe’s recent coronavirus resurgence result in a more dovish outlook from the bank?
Pound Euro Forecast
A slew of high impact data releases from both the UK and EU are likely to keep investors on their toes this week, potentially causing volatility in the Pound Euro exchange rate.