Whilst positive Covid vaccination news has boosted the pound throughout the majority of Q1, yesterday brought fresh lows of 1.1566 for GBP/EUR. Scrutiny of proposed export controls for COVID-19 vaccines manufactured within the EU trading bloc will be a key topic in today’s EU summit, following concerns that the UK is receiving a disproportionate number of vaccines produced on the continent. This could potentially see the pound fall further against the euro, if the outcome of today’s summit is seen as unfavourable for the UK. In a joint statement however, the EU and the UK have both said they are attempting to “create a win-win situation and expand vaccine supply for all”.
The euro also fought back yesterday after both French and German surveys of purchasing managers gave even better results than expected, despite facing new coronavirus restrictions. French business activity exceeded expectations with manufacturing surging ahead at the fastest pace in more than three years, even though large parts of the country faced tougher COVID-19 restrictions as infections steadily rose. Germany recorded similarly positive results with factory activity rising to a record high in March and the services sector expanded.
As mentioned in yesterday’s update, GBP/USD has hit 6-week lows following on from some underwhelming UK data releases. One to keep an eye out for today is the US’ GDP release at around midday. Positive sentiment for the dollar could potentially see the pound lose further footing, although analysts remain optimistic for the pounds long term future.
Have a great day.
Holly Tobia-Parkyn, Relationship Manager.
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