The GBPEUR exchange rate was 0.55% lower on Tuesday morning as traders finally cut the euro some slack. The bloc is currently battling a third wave of the coronavirus and is set to stay locked down but investors are taking profits on the pound after Europe upped its vaccination rates and Boris Johnson drags his feet on foreign travel.
GBPEUR is trading at 1.1710 and the euro is shrugging off a worsening employment situation.
Labour and Lib Dems Push Back on Passports
Boris Johnson’s plans for vaccine passports to enter large events has seen pushback from opposition MPs and Tory rebels. “’Intrusive, costly and unnecessary” were the words of Tory MPs, who feared they could create a “two-tier Britain”.
Boris Johnson has set himself up for a battle as he hinted at pushing the scheme into law without a vote. Labour said it wouldn’t support the plan in its current form:
“On the basis of what we’ve seen… we oppose the government’s plans”.
Adding, “They appear poorly thought-through, will put added burdens on business and run the risk of becoming another expensive Whitehall project that gets outsourced to friends of Tory ministers.
Traders are also taking profits on the British Pound as they realise Boris Johnson’s travel updates will fall short of boosting the airline industry, with the PM sticking to his mid-May travel date.
Recent statements from advisors such as Sage and the University of Warwick after warning of a resurgence of the virus if the reopening is too quick, but they have not explained why that would be after half of the country has been vaccinated and large numbers will have recovered from it.
Euro Shrugs off Poor Employment Data
Spanish employment figures saw a loss of -59.1k jobs this morning after last month’s 44k gain. Alongside this, Italy’s unemployment rate stayed higher than 10% after analysts had expected a drop to 9%. For the overall Eurozone, the rate stayed stuck at 8.3%.
The numbers follow similar disappointing numbers for German employment last week and the European countries are seeing a resurgence of virus cases and lockdowns, so it is unlikely to improve in the near future.
Europe was attempting to ramp up its vaccination schedule last week, but this was affected by the Easter weekend. The numbers should still filter through to a better coverage rate and this is boosting support for the Euro on Tuesday. France’s President Emmanuel Macron joined his Finance Minister in calling for further stimulus last week, just as Macron shut down the economy once more. It’s possible that we get some more talk of this if the third wave talk continues, and lockdown persists. The first 750bn package is held up in the German Constitutional Court, which could delay any release of the funds.
The GBPEUR will need to find support at the 1.17 level if it is to carry on further towards last year’s highs of 1.20. Speak to us using the form below to be kept up to date on the latest currency market movements, so you can make informed decisions about when to trade.