Pound to Euro Forecast: GBP/EUR Exchange Rate Dips as UK Lockdown Extended

January 28, 2021 - Written by John Cameron

STORY LINK Pound to Euro Forecast: GBP/EUR Exchange Rate Dips as UK Lockdown Extended

The Pound to Euro exchange rate fell this morning as the weight of an extension of the UK national lockdown bore down on Sterling.

At the time of writing the pair is currently trading around 1.2570.

Pound (GBP) Exchange Rates Struggle as Lockdown Extended Until at Least March

The Pound found itself on the back footthis morning as the currency struggled against continuing coronavirus woes for the UK.

Despite coronavirus infections declining across the country, the announcement of a further three weeks in lockdown proved negative for Sterling.

Leading a press conference yesterday evening, Prime Minister Boris Johnson stated that March 8th is the ‘earliest’ children could return to school and hereafter other sectors could begin to make their way out of lockdown.

But many investors are jittery over the start of March return to schooling, with Easter just three weeks after the proposed date will the government extend the lockdown for a further three weeks?

Euro (EUR) Exchange Rates Move Higher Despite Vaccine Row

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The Euro moved higher this morning despite an ongoing row over the coronavirus vaccine and a delayed rollout.

Hungary says it has turned to Russia for Covid-19 vaccines because the EU was too slow in delivering them.

Budapest has just signed a deal for two million doses of Moscow's Sputnik V jab.

Hungary’s Foreign Minister, Peter Szijjártó, said

‘Expectations were hyped very high and now we see that the deliveries [from the EU scheme] are much slower and they contain much less vaccine than they were supposed to do.’

‘And still, some European institutions and bureaucrats continue to attack countries which are looking for different or alternative sources in this regard.’

‘It's a matter of life of the people which we have to save. And if we see that the common purchase or common procurement managed by Brussels is too slow, then we have to secure additional supply to the Hungarian people.’

Coronavirus Developments to Push Down GBP/EUR Exchange Rate?

Pound investors will continue to keep an eye on any coronavirus developments, with hopes that the vaccine rollout will allow the economy to reopen at the beginning of March.

Furthermore if cases and deaths continue to decline we could see a more positive outlook to Sterling.

Euro investors will be focused on their own coronavirus developments with any further delay in vaccine rollouts proving negative for the single currency.

In EUR data releases, tomorrow will see the release of Germany’s Unemployment Rate for December which is expected to stay at 6.1% which could cause investors to sell out the currency.

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TAGS: Forecasts