By Lauren Buckner
More than 30 million people in the UK have now received their first dose of the Covid vaccine as the government continues to race towards offering the vaccine to all adults in the UK by July 31st. Sterling remains buoyant on the back of this news and hit a fresh 12 month high versus the Euro on Monday this week finally holding on to some gains above 1.17 on the interbank rate of exchange, but failing to breach the technical resistance of 1.1750 which keeps us firmly within the 1.15-1.1750 interbank trading range.
A further boost to GBP was our first step to lockdown easing from Monday which now enables us to meet up as a group of up to six people or from two different households outside, the first easing of restrictions against much of the UK since Christmas.
For our EUR buyers these rates should be very attractive and represent a significant increase from the 1.09/1.10 levels that were the norm at the turn of the year. The most common question that we face is whether the rates will continue to improve and ultimately, we cannot say for certain that they won’t however, the UK need to continue the impressive pace of vaccinations for both first and second doses of the covid vaccine and see the successful continuation of our roadmap out of lockdown, so the pressure is on us to stay at the forefront of the race to vaccination and economic recovery.
Recent UK economic data has seen better than expected results in employment, business sentiment and public finances which prompted a positive revision to expectations on UK GDP. The Bank of England predicted that the UK economy would shrink 4.2pc in Q1 in it’s February monetary policy report but most analysts settled at predictions somewhere between a 1pc – 2.5pc decline before the release this morning. Coming in at 1.3pc GBP has seen a boost.
Our European neighbours unfortunately continue to struggle to implement a successful vaccination programme amidst a squabble over vaccine supplies as a third wave of the virus continues to take hold. Germany France and Italy are all facing newly enforced or tightened lockdown restrictions whilst Spain, Greece and Belgium are tightening curfews and restricting domestic travel once more. For those in Portugal however, a successful gradual easing of restrictions is beginning to take place, but this is not enough to counteract the difficulties faced by the rest of the bloc.
This has also enabled the USD to trade at its strongest level since October last year against the Euro and was further compounded by March’s consumer confidence for the States which was released at a one-year high. A more upbeat tone of an improving labour market and economy seems to be driving an increase in consumer demand which could see household spending continue to increase over the coming months.
We have the long Easter weekend coming up which will impact liquidity in the forex markets with both the UK and EU taking public holidays. This can lead to unexpected rate movement with less money moving through the global system. This also means we will be closed on both Friday 2nd and Monday 4th April so please do not forget that this could make payment times a little longer than usual, please give the team a call to discuss any requirements that you have as soon as possible.