Pound Sterling Outlook: GBP/EUR, GBP/USD Exchange Rates Remain Resilient despite UK’s Dire 2020 Growth Rate

February 12, 2021 – Written by David Woodsmith

Pound Sterling (GBP) Exchange Rates

The Pound Sterling (GBP) ended the week on a fairly buoyant note, despite confirmation that 2020 was Britain’s worst year for economic growth in 300 years. Investors are still optimistic about Britain’s outlook due to the nation’s coronavirus vaccine rollout.

Many key UK ecostats will be published next week, which could influence the Pound Sterling (GBP) outlook if they surprise. Inflation rate data is due on Wednesday, and Friday’s UK retail and PMI results could be especially influential.

Euro (EUR) Exchange Rates

The Euro (EUR) spent most of the past week benefitting from losses in its rival the US Dollar. The EU is becoming more optimistic on its coronavirus recovery outlook, but the Euro is still weakening against a strong Pound.

Next week will be a busy one for Eurozone data as well. Eurozone growth rate results will be published in the middle of the week with PMIs due on Friday, which could all influence the market’s view of how the Eurozone economy is weathering the coronavirus pandemic.

US Dollar (USD) Exchange Rates

The US Dollar (USD) continued to be sold through the week. Investors sold the US currency from its highs in profit taking and continued signs of weakness in the key US job market.

US retail sales data and Fed meeting minutes will be published next week. However the US Dollar (USD) is likely to remain influenced by market sentiment and coronavirus developments as well.

Australian Dollar (AUD) Exchange Rates

The Australian Dollar (AUD) continued to be weighed by recent Reserve Bank of Australia (RBA) dovishness, though global market optimism is making investors hesitant to sell it too much either.

Markets are anxiously awaiting the RBA’s meeting minutes next week, but stronger Australian job market data later in the week could give the Australian Dollar exchange rates a big boost as well.

New Zealand Dollar (NZD) Exchange Rates

The New Zealand Dollar (NZD) is a risk and trade-correlated currency, and is one of the more appealing on markets. However, due to the Pound’s resilience GBP/NZD exchange rate still rose last week.

Next week will be very quiet for New Zealand news. This will leave NZD reacting to shifts in market sentiment and coronavirus developments.

Canadian Dollar (CAD) Exchange Rates

Prices of oil, Canada’s biggest export, weakened towards the end of the week for the first time in a while. This made it easier for GBP/CAD exchange rate to advance, despite better-than-expected Canadian data.

Oil prices will remain influential to Canadian Dollar movement next week, but there are also many key Canadian ecostats on the way including ADP employment figures and retail sales results.

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TAGS: Pound Sterling Forecasts