Pound Euro Exchange Rate Continues to Gain as Covid Cases Drop
(Updated 17:00, 3/8/21) The Pound Euro (GBP/EUR) exchange rate has kept strengthening today, although at a modest pace, as a health commentator said that the UK may be ‘over the edge’ of its third wave of Covid.
Jamie Jenkins, the former head of statistics at the Office for National Statistics (ONS), said that with daily cases and deaths decreasing, we may have passed the peak of the third wave.
Jenkins also said:
‘The vaccine effect has kicked in as well – if you look at the same number of cases to what we had in the winter, it would have been 800 deaths rather than 65-70.’
The Pound Euro pair is currently trading at around €1.172, up 0.22% from today’s opening value.
Original article continues below:
Pound Euro Exchange Rate: Sterling Gets an Edge amid Lack of Data
The Pound Euro (GBP/EUR) exchange rate is making modest gains today, as falling UK Covid cases give Sterling a slight edge amid a lack of data on both sides.
The pair is currently trading at around €1.1715, just a tenth of a cent up from the start of today’s session.
Pound (GBP) Firms on Covid Optimism
The Pound (GBP) is slowly recovering from yesterday’s lacklustre session, as optimism in the UK’s progress out of the pandemic continues to grow.
Yesterday’s daily Covid cases dropped to 21,952, while weekly cases were at 184,550, down by 27% on the previous week.
While many scientists and politicians are urging caution, it’s clear that the UK’s vaccination rollout is having a powerful effect on both daily cases and critical illness. Some believe the country is approaching herd immunity.
In the UK, 88.6% of adults have had their first dose of the vaccine, while 72.7% of adults are fully vaccinated.
The latest Covid data raise hopes that the UK’s economic recovery will continue, as a lack of restrictions encourages spending and economic expansion. This positive outlook has helped support the Pound today, despite a lack of data from the UK.
Euro (EUR) Adrift in Absence of Data
The Euro (EUR), on the other hand, has been left rudderless today, with no major market-moving data releases from the Eurozone driving the single currency.
However, there is one piece of less impactful data that might be influencing EUR. Earlier this morning Eurostat – the EU’s statistical office – published the producer prices figures for June.
Prices increased 1.4% month-on-month and 10.2% year-on-year. As producer prices usually feed through to consumers, the latest data reinforces the view that Eurozone inflation will continue to increase.
While moderately rising inflation could boost the Euro by indicating economic growth, this may be offset by the European Central Bank’s (ECB) continued accommodative approach to monetary policy.
Meanwhile, a modest weakness in the US Dollar (USD) may be limiting the Euro’s downside by way of the currencies’ negative correlation.
Pound Euro Exchange Rate Forecast: Services PMIs to Support the Euro?
The Pound Euro exchange rate could dip tomorrow morning, as the finalised services PMI figures are expected to confirm that the Eurozone’s pace of growth quickened while the UK’s slowed down.
Additionally, June’s retail sales from the Eurozone are expected to have risen by 1.7%. Any surprise results could prompt more movement in GBP/EUR.