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Sterling tumbles on gloomy outlook for British economy TORFX exchange rate news
Read our latest exchange rate news and plan your currency transfers for the right time.
This week’s rates
Weekly Highs Weekly Lows
GBP/EUR €1.1278 €1.1043
GBP/USD $1.3292 $1.3076
EUR/GBP £0.9055 £0.8866
EUR/USD $1.1918 $1.1747
The Pound to Euro exchange rate fluctuated this week as markets digested news that the pharmaceutical company, Pfizer, had reported a 90% efficiency in its Covid-19 vaccine trials.
Consequently, GBP investors have become optimistic about a roll out of the vaccine as early as December, but Brexit uncertainty has continued to hold back the GBP/EUR exchange rate.
What drove exchange rates this week?
The Pound started well this the week following Pfizer’s announcement of an effective Covid-19 vaccine.
Matt Hancock, the British Secretary of State for Health and Social Care, also buoyed hopes that the UK economy could begin to recover by sparking off hopes of a roll-out of the vaccine for NHS staff next month.
Brexit speculation also drove the Pound, with GBP traders now more hopeful that Joe Biden’s victory in the US presidential election could speed up UK-EU trade talks, as an agreement could be pivotal in a UK-US trade deal.
The GBP/EUR exchange rate began to fall on Thursday, however, following the release of the UK’s third quarter GDP figures, which rose by a weaker-than-expected 15.5%, but indicated growth slowed in September.
As a result, GBP investors are growing increasingly concerned that the UK will suffer a sharp contraction in the fourth quarter.
Meanwhile, the Euro has also been under pressure from growing concerns over Europe’s coronavirus situation.
While Germany and France are under lockdown, it looks like Italy will be joining them as the nation’s domestic Covid-19 cases rises.
Tuesday also saw the release of Germany’s ZEW Survey of Economic Sentiment for November fall to a six-month low.
The US Dollar, meanwhile, suffered from a sell-off of safe-haven currencies at the start of the week as global markets were buoyed by a Covid-19 vaccine being on the horizon.
USD clawed back some of these losses, however, as US political developments remain uncertain, with Donald Trump failing to concede.
What could move exchange rates next week?
US political developments will continue to be in focus this week, with USD investors keeping an eye on Donald Trump’s next move following last week’s US elections.
Any further political volatility could upset global markets and see safe-haven currencies like the ‘Greenback’ benefit.
Euro traders will be awaiting next week’s release of the Eurozone’s latest consumer price index figures to confirm the bloc slipped into deflation last month, while also monitoring Europe’s surge in coronavirus cases.
At the same time, Pound investors will be monitoring the UK’s inflation rate, with a weak reading potentially weighing on Sterling.
Brexit developments will continue to remain a key focus as speculation over a deadline for a draft UK-EU deal before next week’s EU summit looks likely to be missed.
