The pound to euro exchange rate has “traded well” in the past few hours, experts have said. GBP even toyed with wandering above the “€ 1.15 mark” but is still shy of that number. Sterling’s success has fueled optimism following the success of the UK’s Covid vaccine launch.
“Sterling has been trading well against the euro for the past 24 hours,” said Brown.
“”[It tested] the € 1.15 mark before retreating a bit as the pound continued to benefit from the UK vaccination program and a comparatively Hawkian BoE.
“This morning’s inflation data should have little impact on the market, which continues to be highly dynamic.
“Against this background, another test of 1.15 euros or even a break can be expected on the next day.”
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George Vessey, British currency strategist at Western Union Business Solutions, also gave insights into the pound-euro exchange rate.
“The flourishing optimism in the financial markets is helping the risk-sensitive British pound to appreciate higher against its currency counterparts,” he said.
“The UK has now vaccinated over 15 million people and its relatively successful introduction raises hopes that UK economic restrictions will ease sooner than expected.
“This is GBP positive for now, but if there is another wave of infections and another nationwide lockdown, the pound is likely to lose value and wipe out the year-to-date gains.”
Turning to this week, Vessey said, “On this week’s data, UK inflation will be released on Wednesday and is expected to slow down.
“The first signs of how February has been doing on the activity front will be seen through Flash PMI data on Friday, and retail sales and public finances in the UK will also be scrutinized on Friday.”
Commenting on the events in the euro area, Vessey said: “One of the main issues in Europe is the fact that the EU is still lagging far behind its competitors in introducing vaccines, which means that the relaxation of restrictions across Europe is also slower and therefore slower will be slower The economic recovery will be delayed.
“This poses a downside risk for the euro, especially against the GBP.
“The fourth quarter GDP results for the euro zone will fall on Tuesday due to German sentiment polls.
“The European Central Bank will release the minutes of its last monetary policy meeting on Thursday and Flash PMIs will be released on Friday.
“The euro is likely to benefit from an improved global risk appetite, but GBP / EUR could extend its recent surge past the € 1.15 mark given the vaccination gap between the EU and the UK.”
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