Pound to euro exchange rate rises as hopes grow for easing UK lockdown

LONDON: The Pound to Euro exchange rate rose today following news that Covid-19 infections in England had fallen by two-thirds in a month. The pairing is currently fluctuating around €1.15.
Today also saw Chancellor Rishi Sunak back a cautious reopening and easing of the UK’s lockdown measures.
Reports suggest that Sunak’s March budget will reveal another Covid-19 rescue package with the view of a staggard reopening of the UK economy. Allies of Sunak’s say that he wants to avoid stop-start lockdowns going forward.
Hopes of the UK easing lockdown and continued confidence in the rollout of Covid-19 vaccines has also uplifted business confidence to a five-year high, according to a business confidence index compiled by the Institute of Chartered Accountants in England and Wales (ICAEW).
The Euro fell today ahead of the European Central Bank’s (ECB) Monetary Policy Meeting Accounts, due out this afternoon.
EUR traders are remaining cautious, however, after the ECB President Christine Lagarde recently commented on the various risks facing the Eurozone’s economy.
Added to this, the European Union’s (EU) slow vaccine rollout is also dampening confidence in the single currency.
Pound traders will be awaiting tomorrow’s publication of the flash UK Markit Services PMI for February.
Any improvement in the UK’s largest sector would be GBP-positive.
Friday will also see the release of the latest UK GfK Consumer Confidence data for February, which is expected to remain in the doldrums.
However, we could see the gauge improve slightly with hopes of an imminent easing of lockdown restrictions.
Euro investors will be monitoring tomorrow’s publication of the flash Eurozone Markit PMI Composite, which is expected to rise to 48.
As a result, we could see the GBP/EUR exchange rate edge higher as the Eurozone’s economy is likely to remain in contraction territory until spring or even summer.