EURGBP Weakness Continues on Vaccine Confusion

The EURGBP exchange rate is trading near the lowest levels of the year as markets await the European regulator’s decision on the AstraZeneca vaccine. The shot was halted in more than ten countries and is important to the path of the EU’s vaccine program.

EURGBP is lower by -0.22% with the Bank of England also set to update markets on the latest interest rate and monetary policy.

AstraZeneca Confusion Keeps Euro Bulls at Bay

EU leaders are awaiting un update from the bloc’s drug regulator on the AstraZeneca vaccine and today could see another twist in the slow vaccination rollout. The European Medicines Agency will release the results of its review on Thursday.

The blood clot concern has left the EU trailing the UK even further in its race to get the key economies reopened. AstraZeneca’s product was already unpopular in the continent after a feud over delivery cuts and its efficacy in over-65s. The latest issue has seen 200,000 fewer shots in Italy this week, despite the continent seeing rising cases, while France is close to joining them with another lockdown.

It would also be controversial if the EMA placed a ban on the shot after 11 million have had it in the UK. UK Health Secretary Matt Hancock was quick to defend the vaccine despite the latest studies from Denmark.

Only around two million Italian citizens have had the two shots required out of a 60 million population. Even if regulators approve the jab today it is still a long way from the UK’s pace and this will keep pressure on the euro to pound exchange rate in the months ahead.

Eurozone Core Inflation Awaits

The Bank of England is unlikely to provide any surprises in its latest monetary policy decisions on Thursday, but the comments will be closely watched on the bank’s expectation for the economy.

Economists are expecting the central bank to leave its interest rate at 0.1% and to also hold the current level of its support to markets. But markets will be looking for new updates on the pace of how things could change. Other central banks are still projecting rate rises for 2023 despite the recent improvement in fourth quarter GDP.

RBC Capital Markets said in their preview: “There was a notable shift between the minutes of the December meeting and those of the February meeting, the latter having jettisoned much of the caution in the former.”

The bank’s governor Andrew Bailey has still said he was “optimistic, but cautious” in the last week, while his colleague Andy Haldane, the bank’s Chief Economist, has been more bullish on his expectations.

The EURGBP pair was trading at 0.8552 ahead of today’s updates, to discuss these factors in further detail ahead of your currency exchange you can get in touch using the form below.

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