Since the start of the year we have seen sterling show some signs of positivity with the interbank rate against the euro moving from the early 1.11’s at the turn of the year to highs of mid 1.13’s.
The main driver of the pounds bullish movement has been the speed and success of the Vaccine roll out. So far there have been 10.1 million people vaccinated with 494,209 people receiving their second dosage (at the time of writing). These figures shows that the UK is on course to vaccinated 15 million people by the 15th of Feb (within the vulnerable category), a target set out by the government.
However, on Monday the government announced new cases of the South African variant were discovered across England with 105 people testing positive with this variant. However, Chief medical Adviser Doctor Susan Hopkins has mentioned from the COVID briefing on Monday that 3 of the vaccines that have been used to date in trials have been effective against the South African variant. Based on that statement, we could see a further strength for the pound, however if the prevention of the new variant is unsuccessful, then we could see sterling slide in value.
Tomorrow, the main economic news is the Bank of England interest rate report. The rate is still at the record low of 0.1% and while there has been discussions of negative interest rates it seems that it is now highly unlikely with economists stating they do not believe this would help spark a economic recovery. As a result it is forecast interest rates will remain the same, however if you have a currency transfer to make this is a key event to watch. It may be worth discussing your requirements with one of our experienced account managers so you can discuss the options available to you before the announcement.
Yesterday we saw the euro continue to struggle against the pound, after Monday’s German Retail figures were worse than anticipated at -9.6% in December which highlights some of the challenges the Eurozone currently face. Thomas Gitzel Chief Economist at VP Bank Group stated, “The containment measures left massive scares in December. Compared to November, sales dropped by an alarming extent”. With a mixture of lockdowns and curfews across Europe there has been a hit to the economy.
One of the key reasons why the Eurozone economy has been under pressure could be attributed to its slow vaccine roll out as well as slow vaccine approvals. So far the bloc has managed to vaccinate 2% of its population with Germany only vaccinating 2.77 out of every 100 people. Comparing those number with other countries such as the UK where 13.95 people out of every 100 have been vaccinated and Israel who have been one of the most successful in getting their people vaccinated with 54.72 people out of every 100 now protected. This highlights the potential challenge the Eurozone will face as other economies could recover faster as a result.
During yesterday mornings trading session we saw the announcement of Eurozone Gross Domestic Product (GDP) numbers. As covered in yesterdays report we had seen a number of the major European economies recently post better than expected GDP figures and this trend continued with GDP for the single currency bloc coming in at -0.7% against an expected -1.2%. This means the Eurozone economy shrank in the final quarter of last year by 0.7% but as the contraction was less than forecast the reaction was muted.
Today we have both Consumer Price Index (CPI) and Producer Price Index (PPI) both of these data sets will provide an insight into inflation in the Eurozone. The forecast is for an increase compared to last month, if we see the data come out higher than expected we could see the euro strengthen.
The US is preparing for a huge vaccine distribution to tackle the coronavirus pandemic as the United States still leads the way for the highest deaths since the pandemic has begun. So far The US death toll stands at 443,000 deaths and 26 million cases.
The US are looking to have as many people vaccinated within their local pharmacy. This is after President Joe Biden’s administration deciding on allocating 1 million doses of vaccine to 6,500 locations.
This was after Jeff Zients (President Biden’s Covid-19 Coordinator) announced on yesterday that they will start the distribution directly to pharmacies nationally with the vaccinations commencing on the 11th of February. Jeff Zients mentioned, “1 million doses will be allocated next week to those 6,500 pharmacies that’s in addition to the 10 and half million does that are going to go to state, tribes and territories that’s the first phase of the pharmacy programme, and will phase up” he also added, “Eventually, as we’re able to increase the supply up to 40,000 pharmacies nationwide could provide Covid-19 vaccinations.
This action was done in order for the US to catch up with countries that have been very active with their distribution, countries such as Israel, UK and the UAE.
As these events take place, it is certain that the new President is trying to start its economic recovery. If all goes to plan we could see a real optimism towards the currency and the light at the end of the tunnel.
Today, we will get the first insight of the week into the health of the US jobs market. This afternoon we have the employment change figures announced ahead of initial jobless claims tomorrow, if these figures shows a further increase on its unemployment then it could show weakness on the dollar. Another report that you could look out for is the non-farm payroll figures on Friday.
Always a fast and efficient service, a good rate and a simple transfer.
Excellent customer service, very friendly and helpful staff. The process of money transfer is painless. Thank you.
The service was effortless to use and I was kept up to date all the way through the process with courtesy calls and advice from the same contact in the selling of my home abroad and returning the funds back to the UK. I would highly recommend this service to friends and colleagues in the future.
Efficient service and good rates. My currency reached my overseas bank same day!
I find the process to be efficient, uncomplicated, and very good value – the exchange rates used are unbeatable, and the fixed service charge is insignificant when sending a large-ish sum.