The EUR to GBP exchange rate was trading lower for a fourth-straight day as Sterling finally found some supporters. The currency has been under continued pressure with the virus and Brexit, but there is hope that the country can exit the virus quickly and get back open once more.
Euro versus sterling was lower by 0.17% on Tuesday and last week’s lows near 0.8932 would be the target.
UK Looks to Vaccine as the Path out of Lockdown
The UK government is pinning its hopes on the vaccine to get the economy back open. Seven mass vaccination centres opened in England on Monday and the government has set an ambitious target of vaccinating up to 15 million people by February 15th. Once these older age groups are immunized, there could be more flexibility seen in the strict lockdown measures plaguing the country.
The pound sterling has struggled since November as the country was pushed back into tiered lockdowns but the country is leading Europe in the race to administer vaccines and this could lead to further losses for the euro. Britain’s 2.6 million vaccinations is higher than the entire eurozone combined.
Telecoms Boss Sees an ‘Exciting Chapter’ for Britain
The CEO of Spanish telecoms giant Telefonica has given the Brexit agreement a “vote of confidence” and said he expects the economy could see a “rapid bounce-back” this year.
Maria Alvarez-Pallete, said that the country’s departure from the EU “marks an exciting new chapter in Britain’s history”. Telefonica owns the UK operator O2 and Alvarez-Pallete saw the country gaining a renewed confidence and that there was an opportunity to lead in areas such as the digital revolution.
The remarks are a boost for the country after the exit from the EU but with the deal now signed, that optimism will have to filter through to the Gross Domestic Product (GDP) and trade numbers once the economy can bounce back from the effects of the coronavirus.
Data on Thursday sees the European Monetary Policy meeting minutes, and this is followed by UK GDP the following day. The EU minutes may give some hints about the next path for the ECB in 2021. The European economy is struggling to see inflation and is not on track for the bank’s goal of 2% inflation. This could lead to further stimulus, especially in light of the recent lockdowns, but the stimulus path is not seeing a desired effect and some action could be taken on the euro strength. The UK GDP is an update for November but these figures will be affected by the recent lockdowns. The vaccine race is likely to dominate the sterling to euro exchange rate in the near-term.
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