- Pound (GBP) lifted by vaccine rollout & reopening optimism
- UK CPI to show -0.4% MoM decline
- Euro (EUR) pressurized by stronger USD
- Q4 GDP & German sentiment beat forecasts
The Pound Euro (GBP/EUR) exchange rate is climbing higher for a fourth straight day. The pair settled +0.2% higher on Tuesday at €1.1480 after reaching just shy of €1.15 earlier in the session. At 05:15 UTC, GBP/EUR trades +0.05% at €1.1486. The pair is has already gained 1.7% so far through February.
The rapid rollout of the UK covid vaccine programme continues to underpin the Pound. According to the UK vaccine task force all adults in the UK could be given two doses of the covid vaccine by August or September.
Britain has so far vaccinated 15.6 million people. The fastest rollout per capita of any large country.
The quicker that the vaccine is distributed the more quickly the UK will be able to reopen its economy.
The Pound could come under pressure today as investors look ahead to the release of UK inflation data for January. Analysts are expecting consumer prices to decline -0.4% month on month after rising +0.3% in December. On an annual basis CPI is expected to rise 1.3%, up from 1.2% in December.
The Euro came under pressure owing to the stronger US Dollar as surging treasury yields boosted the greenback.
The Euro trended lower despite GDP for the fourth quarter coming in better than initially estimated. The GDP second readiing revealed that the economy contracted by -0.6% quarter on quarter in the final three months of the year, rather than -0.7% initially reported.
German economic sentiment also unexpectedly shot higher in February to 71.2 up from 61.8 in January and well ahead of the 59.5 analysts expected. The data reveals that confidence is rising that the German economy will bounce back to growth.
There is no high impacting Eurozone data due so the Euro is likely to be driven by sentyiment and the US Dollar.