Pound surges as BoE takes negative rates off the table

  • During this period we’ve seen GBP/EUR climb from €1.12 to €1.14 whilst EUR/GBP slipped back to £0.87.

    Meanwhile, GBP/USD has climbed to a new eight-month high of $1.37, while EUR/USD slipped from $1.21 to $1.20.

     

    Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…

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    The pound has enjoyed notable support in recent weeks, amidst the UK’s vaccination success and the Bank of England’s dismissal of negative interest rates.

     

    What’s been happening?

    The pound has steadily climbed higher over the past couple of weeks, finding support courtesy of the UK’s success in rolling out its vaccination programme.

    Turbocharging these gains was the BoE’s first policy meeting of 2021, following which the bank poured cold water on the idea of implementing negative rates during the current cycle of monetary easing.

    The euro, meanwhile, has come under significant pressure over the EU’s slow rollout of vaccines, as well as confirmation the Eurozone economy shrank in the last quarter of 2020.

    At the same time, the US dollar has been revitalised over the past couple of weeks, with some erratic movement in equity markets and a bump in US Treasury yields boosting the appeal of the ‘Greenback’.

     

    What do you need to look out for? 

    Looking ahead, the immediate focus for GBP investors will be on the UK’s latest GDP figures, with the pound potentially receiving a boost if the UK economy expanded as expected at the end of 2020.

    The euro is also likely to remain sensitive to vaccination efforts in Europe, with the single currency likely to face additional headwinds so long as the rollout continues to disappoint.

    Meanwhile, in the US, the spotlight is likely to be on Joe Biden’s stimulus efforts as the new President’s $1.9 trillion relief package still faces some hurdles.

     

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