GBP/USD: Pound Dips As UK Polititcs & G20 Take Centre Stage

The British pound is higher against the euro on Tuesday.

A sweeping return of optimism across markets saw riskier currencies like the pound push higher while an index for the top five hundred US company shares reached its highest since early March.

The euro lost ground after a French central banker emphasised that the government bond buying in Europe was no longer restricted by previous rules according to asset class and jurisdiction.

The Pound versus Euro was higher by 62 pips (+0.55%) to 1.1237 as of 3pm GMT.

GBP/EUR regained 1.12 early on and continued to rise throughout the day until steadying near 1.125. Yesterday the exchange rate had risen by +0.14%, leaving it higher by +0.74% this week.

GBP: Vaccine race boosts the pound

US stock market benchmark, the S&P 500 reached over the 3000 threshold for the first time since early March on Tuesday. News from US pharmaceutical company Novavax that its coronavirus vaccine is starting human trials bolstered investor appetite for risk, an environment that typically benefits the British pound.

The first set of early-stage results of the trials will be available in July. There is now a race among pharmaceutical companies and national governments to produce a coronavirus vaccine. The growing sense of competition should increase the speed in which a vaccine will be widely available to the general public.

EUR: Bond buying should be ‘flexible’

Banque de France Governor Francois Villeroy emphasised in an interview on CNBC that the European Central Bank needn’t be restricted to buying bonds in quantities that reflect the size of the respective economies. The so-called ‘capital key’ was an important feature of the European Central Bank’s previous bond purchase programs.

It prevented the ECB from distorting capital markets by, for example buying lot of bonds from countries with higher risk-profiles and driving down the rate of interest on those bonds in the process. The risk is that when national governments with a history of overspending are given the opportunity to borrow at artificially low borrowing rates, they will grow borrowing to even more unsustainable levels, creating risks to the European economy. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. ("We", "Us"), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.