February 22, 2021 – Written by John Cameron
The Pound to Euro exchange rate was rangebound at the start of this week’s session, as GBP investors and the UK general public alike wait for Prime Minister Boris Johnson’s roadmap out of lockdown announcement this evening.
At the time of writing the pair are currently trading at around 1.1571.
Pound (GBP) Investors Optimistic Over Lockdown Easing
The Pound remained steady this morning, as the day arrives for Prime Minister Boris Johnson to announce his ‘roadmap’ out of the third national lockdown which was implemented to combat the coronavirus pandemic.
Although the Prime Minister is not expected to speak until tonight’s press conference at 7pm, many newspapers have begun reporting on what is expected to be announced this evening.
As expected, schools are to reopen on the 8th of March, while recreation in public places between two people will also be allowed.
Following on from this at the end of March, the rule of six is expected to be put into effect again, with outdoor gatherings allowed, including in private gardens.
Speaking this morning, vaccines minister Nadhim Zahawi spoke on the gradual easing of restrictions and whether the UK could see a return of the tier system, saying:
‘I think because the way this new variant actually took hold, which has become the dominant variant, the Kent variant, in the United Kingdom, infection rates around the country pretty much rose to similar, very high, unsustainable levels.’
‘So the view is very much that this is about a gradual reopening of the whole of England, not regional.’
Euro (EUR) Limits Losses as German Business Confidence Increases
Despite struggling against the Eurozone’s coronavirus situation, the Euro has managed to limit losses this morning as the latest Ifo Business Climate indicator from Germany beat forecasts and rose to 92.4 points, the highest level for four months.
However, as coronavirus lockdowns and curfews continue to be brought in and extended across the bloc, Euro investors remain cautious over the state of the Eurozone’s economy and when recovery can truly begin.
With European Central Bank (ECB) President, Christine Lagarde expected to speak this afternoon, Euro traders will be keeping a close eye on any dovish commentary regarding the Eurozone’s economic recovery.
GBP/EUR Exchange Rate Forecast: UK Employment Data in Focus
For Pound investors, tomorrow sees the release of UK employment data from the end of 2020. The unemployment rate in the UK for December is expected to rise from 5% to 5.2%, if the data manages to beat forecasts then Sterling would be supported.
Euro investors will be looking towards the midweek release of GDP data from the Eurozone’s largest economy, Germany. The final data of Q4 is expected to show a modest growth of 0.1% which could see Germany avoid a double dip recession.
The GBP/EUR exchange rate will continue to be moved by any further coronavirus developments, with any indication in the coming days over any more dates regarding the UK’s easing out of lockdown adding further support to GBP.
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