The EURGBP exchange rate was weaker by 0.15% after the euro failed to hold gains above the 0.8700 level against the British pound. The UK will see the latest employment report on Tuesday, while Germany and Portugal loosened restrictions to the country due to its high vaccination levels.
The EUR to GBP rate is trading near 0.8650 and the pound will look to build on recent gains after the currency after traders bailed out of the pound over the last couple of weeks.
Johnson Urged to Cancel India Trip
The latest talk of virus variants is that of the India version, which scientists said was a “variant of concern”. There were calls for a travel ban on arrivals into the UK and it’s bizarre that Brits can receive a heavy for travelling abroad, while its own borders are open for travellers. Boris Johnson was also under pressure to halt his own planned trip to India for trade talks at the end of the month as governments and health advisors continue to preach safety, while the rules are not applied across the board.
Government data up to April 17th says that 42 million jabs have now been given in the UK, with 32 million being first doses. This has led to Germany and Portugal loosening their previous travel restrictions on the UK and it will be hoped that other countries follow into May, but Germany is still looking to get its virus numbers under control and it may not be the UK that are the issue.
Europe’s vaccination program is still stuttering with Spain reporting a drop in deliveries and decision to close mass vaccination centres in Madrid. The recent issue over blood clots in two of the vaccines has led to further delays and this will play into the growth figures for Europe in 2021, while a failure to reopen could also see further stimulus measures taken by the EU or the ECB.
UK Data Will Lead Before ECB Interest Rate Update
The EUR to GBP pair will be led by data from the UK early in the week with the unemployment numbers on Tuesday being followed by inflation on Wednesday. This will lead the euro v sterling rate into the European Central Bank’s latest interest rate update on Thursday. The ECB are unlikely to make any moves this month, so it will be the UK data that produces much of the price action this week.
Another loss of jobs is seen for the UK on Tuesday despite the extension of furlough and the exchange rate will move based on the accuracy of that number. Some hiring was displayed in the recent services PMI figures so there is potential for an upside surprise to the British pound. The country’s roadmap for reopening should have also led to businesses planning for the year ahead.
The inflation figures on Wednesday are expected to show an increase to 0.7% from 0.4% and the Bank of England could have a job on its hands to cool price expectations once the reopening is complete.
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