- Pound (GBP) advances as vaccine rollout continues at full speed
- UK GDP data on Friday
- Euro (EUR) under pressure on USD strength, slow vaccine programme
- Mario Draghi & Italian politics in focus
The Pound Euro (GBP/EUR) exchange rate is advancing, building on gains from last week. The paid gained 1% across the previous week, its second straight week of gains and settled at US$1.14. At 05:15 UTC, GBP/EUR trades +0.05% at €1.1407.
Last week the Bank of England distanced themselves further from the use of negative interest rates, ruling out imminent use of the tool boosting sterling. Concerns over the use of negative interest rates have been lingering for months. However, the results from, the BoE consultation into the use of negative rates has allowed Pound traders to breathe easy at least for now.
The UK’s rapid vaccine rollout programme has also under pinned the Pound. The UK has so far vaccinated 16% of the population is on track to achieve its target of 15 million Brit vaccinated by mid-March. Suggestions that all over 50 year old’s could be vaccinated by the end of May has also helped to boost hopes that lockdown restrictions could bee eased soon with a level of normality returning by the summer.
There is no high impacting UK economic data due for release today. In fact, the UK economic calendar is relatively quiet this week except for Friday which sees the release of UK fourth qarter GDP data.
The Euro was under pressure across the board last week, thanks in part to a strengthening US Dollar and also owing to the slow covid distribution across the old continent. Germany, for example has so far only vaccinated 3.5% of its population and France just 2.8%. The slow deployment of the vaccine is triggering fears of a slower than expected economic recovery in the EU.
Attention will also be on Italy where, Mario Draghi, the former ECB governor, is attempting to form a government. Investors will hope that he can implement policies which support growth in a region which has long under performed its peers.