Euro pound climbs as strength of US dollar limits euro appeal
The exchange of the British Pound and the Euro (GBP / EUR) has been steadily rising since the markets opened this morning, with investors becoming cautiously optimistic about the UK’s economic recovery in the face of the coronavirus .
GBP / EUR is trading around the 1.1654 level as the Euro weakens due to lack of economic data.
British Pound (GBP) exchange rates strengthen on hopes of economic recovery in UK
The British pound strengthened during this morning’s session as investors became more optimistic about the UK’s economic recovery from the coronavirus.
Although Prime Minister Boris Johnson last week announced a further four-week extension of the current lockdown restrictions, an increase in vaccinations has made Sterling attractive.
More so, vaccinations appear to have broken the link between infections and hospitalizations despite an increase in coronavirus cases.
Chris Hopson, chief executive of NHS Providers, commented on the latest hospital admissions figures, saying:
“Two weeks ago, on June 4, we had 800 Covid-19 patients in the hospital; on Friday it was 1,170. In November, they were 14,700 and [in the] Peak from January / February, there were 34,000 people in hospitals with Covid-19.
“It’s growing relatively slowly, but it’s nowhere near the kind of numbers we’ve had in previous waves.”
Euro exchange rate (EUR) Fight against the strength of the US dollar (USD)
The euro collapsed against the pound this morning following continued strength in the US dollar.
Following hawkish comments from the Federal Reserve late last week and a more cautious mood in the market, the US dollar has continued to strengthen.
Due to the negative correlation between the euro and the US dollar, the euro has weakened against many of its counterparts.
More so, a lack of notable data from the eurozone did nothing to support the single currency during this morning’s session.
GBP-EUR exchange rate outlook: Flash PMI at a glance
For pound and euro traders, tomorrow’s UK and Eurozone flash PMI figures for June should boost the pair’s movement.
If euro zone flash PMIs continue to show sustained growth in the bloc economy, the euro could find much needed support.
Investors in pounds will keep an eye out for any further development of the coronavirus over the next few days, any indication that July 19’s ‘freedom day’ goes off without a hitch will provide further support for the pound.