After what seemed like a very long week- it seemed that the main topic was vaccination exports and supply- with much news coming from the UK & EU about exports being blocked and supply being lower. This controversial topic was the main subject of the EU Council meetings at the end of the week which did manage to add some color to the situation- my hope is that these issues can be solved as soon as possible, the sooner the world can be in the same place in regards to vaccinations, the better- for everybody.
Sterling was relatively subdued throughout the week- especially against a strengthening Dollar- which brought rates down to lows of 1.3670. In my eyes this current surge in DXY is giving people an opportunity to sell off USD into GBP before prices go back above the 1.40 handle- if you are currently in this situation it is worth looking into options at current prices.
The subject of Lockdowns in the EU has been the main thing on news wires this week- with many countries announcing new lockdowns and curfews- this has unfortunately added to the Euros weakness for the here and now- with EURUSD exchange rates falling to the 1.17 area and GBPEUR rising to 1.17. Until Covid cases fall further in Europe and vaccinations rise- my belief is that GBPEUR will rise further and EURUSD will continue to fall, maybe into the 1.16 area until we begin to see things open up.
Looking at the UK now- the official “Stay at home” orders will lift as of Monday 29th March- and we begin our next step to lifting lockdown, with non essential shops set to open April 12th. I do not expect any further lifting of lockdown to push the Pound price up as this has already been priced in- but the fact that the UK will be spending again is positive and we should see this reflect in exchange rates over coming months. Good weather in the UK this week before the Easter bank holiday will also encourage any spending that can be done outdoors (Coffee shops etc) and trips to the seaside, this also will have an effect in figures through May/June.
Last piece of news to mention is that the UK & EU seem to be making progress with the Brexit financial services deal- London and Brussels seem to be “On the cusp of a high level agreement on a new regulatory framework for financial regulation that could revive London-based firms access to European markets” – this, of course, is fantastic news- and I am sure when this is completed Sterling exchange rates will also see a boost from the good news. Unfortunately, the UK Government has refused to give a “running commentary” on this particular deal and we will have to wait to see when it is actually done.
As we are at the end of the month, quarter and financial year- we are always prone to seeing moves across the market- so if you have a particular situation you wish to discuss- please don’t hesitate to contact me prem.raja@currencies4you.com