The British pound is higher against the euro on Monday.
- EU Recovery fund talks resume at 16:00 after 1hr delay
- Oxford / AstraZeneca vaccine trail shows ‘good ‘T-cell response’
- Pfizer/BionTech announce positive vaccine study results
- Euro gains vs. dollar: EUR/USD reaches 4-month high
GBP/EUR was up by 60 pips (+0.55%) to 1.1060 as of 3pm GMT. Last week the pound-euro exchange rate slid -1.55%.
The currency pair slid below 1.095 in early trade but rallied over 100 pips thereafter to top 1.105. On Friday it dipped -0.1%
GBP: Sterling buoyed by UK vaccine and improved market sentiment
Sterling has started the new week with a better tone than the last, having ultimately lost over 1.5% Monday through Friday.
The Oxford vaccine which is being tested in conjunction with UK/Dutch pharmaceutical company AstraZeneca ‘shows good antibody, T-cell response’ according to an article in the Lancet, a scientific journal. It was a small trial of groups of 500 & 1000 and the company is now doing late stage II and III trials in UK, Brazil and South Africa.
Having a leading COVID-19 vaccine produced on home soil will be an advantage to any currency over the coming months, as investors monitor the pandemic and its economic affects.
EUR: Even split on loans / grants could satisfy ‘Frugal four’
Vaccine news was also good on the other side of the channel, helping both the euro and the German DAX stock index reach four-month highs. Pfizer in partnership with BionTech announced positive vaccine study results for their German phase I and phase II studies.
Otherwise, the biggest driver for the euro was progress towards an agreement for an ‘EU Recovery fund’. Having hit the skids over the weekend, there was apparently a late breakthrough in negotiations on Sunday, which led to talks resuming on Monday at 15:00, which was later delayed to 16:00 GMT.
Objection to the idea of grants or the joint issuance of debt seems to have washed aside inside the pandemic. A deal looks like it is in the offing, once EU leaders agree on the ratio of grants to loans and the overall size of the fund.
