- Pound (GBP) remains resilient on vaccine optimism
- Over 7 million UK people have had first jab
- Euro (EUR) declines of ECB rate cut talk
- Eurozone consumer confidence in focus
The Pound Euro (GBP/EUR) exchange rate is extending gains for a fourth straight session. The pair settled +0.25% at €1.1295 after rising to a high of €1.1350 on Wednesday. At 05:15 UTC, GBP/EUR trades +0.1% at €1.1305.
The Pound pushed higher amid growing optimism surrounding the UK covid vaccination rollout. Despite still rising cases of covid infections the spread of the UK’s more contagious and possibly more deadly covid mutation, traders ware more optimistic surrounding the prospects of the Pound.
The UK is currently leading the vaccine race in Europe with over 7 million people now having had their first jab. Boris Johnson has also dismissed Brussels demand to snatch up to 75 million vaccines made in the UK to make up for a shortfall in the EU.
There is no high impacting UK data due to be released today. Attention will remain on covid and vaccine developments.
The Euro came under pressure in the previous session after the European Central Bank hinted at interest rate cuts in the previous session. Policy maker Knot, typically considered a hawk, made dovish remarks, hinting that the ECB could cut interest rates to prevent any further strengthening of the Euro.
Furthermore, a Bloomberg report citing ECB sources reported that ECB officials consider that the market is underestimating the prospect of another interest rate cut.
Adding to the downbeat mood the forward looking German GFK consumer confidence survey plunged to -15.9 in February, down significantly from -7.5 in January and much worse than the -7.9 expected. The extended lockdown restrictions and rising job fears are sapping consumer sentiment sending confidence lower for a fourth straight month as the Eurozone’s largest economy struggles to cope amid a second wave of covid.
Attention will remain on the Eurozone economic calendar with German CPI and Eurozone Economic Sentiment for January expected to edge lower