Home Daily Commentaries Euro pushes higher on vaccine optimism

Euro pushes higher on vaccine optimism

Daily Currency Update

GBP - British PoundGBP/USD has continued to recover after its dip earlier in the week, as dollar selling helped it rally back up towards the 1.38 handle. With the UK economy unlocking, the outlook for the rest of the country is improving and if pent up consumer demand results in a spending splurge, a move back to 1.40 could be on the cards. A lot will depend on the US Federal Reserve continuing to downplay the chances of tightening the monetary policy, however at present the path of least resistance seems higher. With data light on the ground this week from the UK, the main driver for sterling has been the ongoing successful vaccine campaign, which has now seen more than 32 million jabs administered. Despite an uptick against the dollar, the pound has been drifting lower versus the euro, as optimism about its vaccination campaign improves. GBP/EUR is currently just above 1.15.

Key Movers

As mentioned before, optimism seems to be returning to the euro, as the bloc seems to be finally getting up to speed with its vaccination programme. Despite the high coronavirus infection rate in many countries, markets seem to be paying more attention to a rapid increase in jabs which has led EUR/USD to rally higher. After being close to breaking below 1.17 a couple of weeks ago, the pair is now heading back to the 1.20 handle, however this key level will offer stiff resistance. Today’s main event will be US Retail Sales numbers which are due at lunchtime. A monthly increase for March of 5.8% is being eyed and anything above this figure should support the dollar. We also have US weekly unemployment numbers at the same time, which are predicted to show around 700k filing for unemployment insurance last week. Tonight sees Chinese first quarter GDP released, with a huge annual increase of 18.3% predicted, as the world’s second largest economy stages a huge bounce back. Should the target be beaten, then we can expect the upward momentum currently seen in stock markets push through to tomorrow. EUR/USD trades at 1.1975

Expected Ranges

  • GBP/USD: 1.37 - 1.3860 ▲
  • GBP/EUR: 1.1480 - 1.1580 ▼
  • GBP/AUD: 1.77 - 1.7860 ▼
  • GBP/NZD: 1.9180 - 1.93 ▼
  • GBP/CAD: 1.7170 - 1.7310 ▼