The GBPEUR exchange rate was 0.12% higher in early trading on Wednesday as the pair attempts another breakout. The euro is attracting sellers after Italian Prime Minister Giuseppe Conte resigned, Holland saw another night of anti-lockdown riots, and Europe faced problems over vaccine delays.
The GBPEUR was trading at 1.1300 and this level is key to further gains in sterling.
Italian PM Goes, Holland Sees Further Unrest
Italy’s government is embroiled in another crisis after Prime Minister Conte handed in his resignation. Conte’s move is seen as a political gamble that he can stay in charge by building a new coalition. This comes after his government lost its majority, due to the resignation of the Italia Viva party.
The GBP to EUR rate has pushed higher with the move as it still highlights instability in a country that was problematic before the virus. The situation is also another distraction as Europe seeks to mobilize vaccine rollouts. Italian politicians will be focused on power struggles as when efforts would be needed with vaccine distribution.
Riots and looting have been breaking out in Holland since Monday in defiance of lockdown restrictions. The unrest has occurred in multiple cities, including Amsterdam, Rotterdam and Eindhoven. European officials will be concerned that these protests could spread further.
The GBP to EUR exchange rate outlook is also moving in sterling’s favour due to vaccine rollouts. Drug maker AstraZeneca joined Pfizer in delaying shipments to Europe because of manufacturing issues. This has seen the EU unable to get its vaccination program off the ground, while the UK has already vaccinated around 6 million residents.
German Consumer Hopes Dent Euro
German consumer confidence data this morning was a disappointment with a dip which was twice as large as expected. The number was expected to show a negative reading of -7.9, but came in at -15.6.
The numbers add to recent disappointing retail sales in the UK and highlights the problems that economies face with the current lockdowns. Economic growth is now becoming one-sided as the services element is being destroyed in many countries.
Tomorrow brings the latest inflation reading from the German economy and traders are hopeful that the country can see a bounce from deflationary territory. This could help the euro as it would take some pressure of the European Central Bank to tackle a stronger euro.
The GBP to EUR exchange rate is trading at 1.315 and a further push higher could see the rate at 1.1500. The pound sterling never saw much of a bounce from the Brexit deal and if it continues along the vaccine path, the economy could open up more quickly that Europe’s and see some further recovery in sterling. Get in touch to discuss these factors in further detail and to see how your upcoming currency exchange is likely to be impacted.