GBPEUR surged to fresh 13-month highs on Monday as market sentiment became increasingly positive about Britain lifting lockdown restrictions. Positive steps for Britain, coupled with the market pricing in a new serge of infections in Germany and France, helped push the rate higher on the day. With over 57% of UK adults now having had their first dose, Q2 should see Britain able to reopen its economy long before any EU state is able. In contrast to the UK, Europe has only managed to give the first dose of the vaccine to just over 15M people. In response to the rising cases in Germany, Chancellor Angela Merkel has criticised some regional restrictions, claiming some state governors have held back from issuing tougher measures. As she threatened to centralise Germany’s COVID-19 response, Merkel stated the country “must now put in place the appropriate measures with a lot of seriousness”.
While the Euro struggles the US Dollar continued to trade above 4-month highs on Monday, making advances against nearly all its peers by the close of the session. EURUSD unsurprisingly made moves to the downside yesterday and is likely to depreciate further as the old continent struggles to immunise its population. If the US are able to outpace Europe in their vaccine roll out, EURUSD will fall.
GBPUSD opened the week at 1.3763 and supportive month-end flows enabled Cable to resist the stronger Greenback and make subtle gains by the close. The pair finished the day at 1.3771.
GBPEUR started the week at 1.1688 and surpassed the 1.17 mark on the day, closing at 1.1706.
EURUSD opened Monday at 1.1775 and fell to 1.1763 by the close. With the Dollar still pressing, investors will look to capitalise on any weakness from the pair.