March 3, 2021 - Written by John Cameron
EUR/USD Exchange Rate Rangebound as EU Lockdowns Weigh on Eurozone Economy
The Euro to US Dollar (EUR/USD) exchange rate was largely muted today, with the pairing currently fluctuating around $1.20.
The Euro has suffered this week owing to largely underwhelming Eurozone economic data. Germany’s retail sales for January tumbled by -4.5, despite forecasts for a more modest contraction of 0.3%.
The Federal Statistics Office commented:
‘This decline can be explained by the ongoing coronavirus lockdown, which meant a closure of many retail stores since Dec. 16, 2020.’
Today also saw the publication of the latest Eurozone PMI Composite report for February, which came in at a lacklustre 48.8.
March 2, 2021 - Written by John Cameron
GBP/CAD Exchange Rate Rangebound as UK House Prices Rise in February
The Pound to Canadian Dollar (GBP/CAD) exchange rate held steady today as the search for the UK’s missing Brazilian Covid-19 variant is narrowed down to the south-east. The pairing is currently fluctuating around CA$1.76.
As a result, Sterling investors are remaining cautious as the Brazilian variant could cause a problem for the effectiveness of the UK’s Covid-19 vaccination further down the line.
According to researchers, the original variant was found in Manaus Brazil and can evade 25% to 61% of the protection of people living in the Amazonian city.
At the time of writing the pair is currently trading at around $1.7550.
Pound (GBP) Muted as Bank of England Holds Interest Rates
The Pound was muted against the Canadian Dollar today following on from Thursday’s Bank of England (BoE) February policy decision.
As expected, the bank left rates unchanged at 0.1% and lowered its 2021 Q1 growth forecasts.
The more upbeat news for investors, however, was the downplaying of potential negative interest rates. Although banks were told to prepare for the possibility of negative rates within six months, the BoE clarified they were not imminent.
There was positive coronavirus news coming from the UK, as the R value has fallen to 0.7-1 across the country.
The Pound to Japanese Yen exchange rate held steady today, with the pairing currently fluctuating around ¥142.000.
The Japanese Yen benefited from news that Japan’s economy could recover to levels seen before the Covid-19 pandemic as early as this March.
Bank of Japan (BoJ) Governor Haruhiko Kuroda explains:
‘Both fiscal and monetary policies have been successful in preventing corporate failures and unemployment.
‘We expect, probably by the end of fiscal 2021 or early fiscal 2022, that Japan s economy would recover and come back to levels before the pandemic started.’
As a result, Japanese Yen investors are now more confident that Japan – the third-largest economy – could begin recover in the next few months.
January 7, 2021 - Written by John Cameron
GBP/CAD Exchange Rate Rangebound as UK GPs and Pharmacies to Rollout Covid-19 Vaccine
The Pound to Canadian Dollar (GBP/CAD) exchange rate held steady today, with the pairing currently trading around CA$1.72.
Sterling benefited from news that UK GP’s surgeries and pharmacies would be allowed to rollout out the new Oxford/AstraZeneca Covid-19 vaccine.
As a result, GBP investors are becoming more hopeful that the UK could vaccinate large swathes of the vulnerable and at-risk population by mid-February.
Nevertheless, rising Covid-19 cases throughout England are dampening confidence in Sterling.
In UK economic data, today saw the release of December’s UK Construction PMI, which reassured markets at 54.6.