After the Bank of England said that interest rates would not be dropping last week, this paired with slow weeks for the both the EU and the US, the pounds has been on the rise.
Western Business Solutions strategist George Vessey believes that the next target for pound to euro rates is 1.15 and that it is very achievable as the pound finds itself on a bullish path. The pound might also continue to rise with the UK being told that holidays abroad and even in the UK could be at risk and to not book anything just yet, with Brits holding onto their sterling and not buying their euros for their holidays this year could cause further weakness for the euro without its almost yearly injection of holiday makers money into the local industries.
State Transport Secretary Grant Shapps said that Mr. Johnson is due to speak on the 22nd of February to discuss the potential easing of lockdown in the UK with some non-essential shops being opened and more social interaction but he doesn’t believe that this will include the relaxing of travel restrictions with arrivals from certain areas having to quarantine in hotels on arrival. If the UK can get itself in a good position with a large proportion of the population vaccinated workforces can get back to some sort of normality which could cause the value of the pound to rise with the improvement of the economy, however there are a lot of variables and the first stage as outlined by the PM is to get the schools open again which in the past has caused the R number to rise.
Early this morning the EU commission will release the EU economic forecast, this should show what each member for the Bloc will think their economy will look like over the next quarter and highlighting any trends across multiple economy's so that measures can be put in place to try and stop any major issues. If this news is positive and the forecast is for a rise in the economy the euro could gain is strength against its currency pairs. If you have a transfer involving the euro please get in touch with your account manager for any updates and its effect on your transfer.
The EU are also asking for more time to get a deal with the UK but Gove has said the EU will require a ‘different spirt’ for any big issues to be solved. In the talks today, Gove will try and sort out the issues between the EU, Northern Ireland and Britain. He believes that we are currently in a turbulent time but could soon be above it all and enjoying a fully working trade agreement, he is also keen to not discuss the same topic which he discussed just a month ago about an extension of the ratification of a trade deal period which is due to end at the end of the month as he doesn’t want to keep pushing date back without a concreate goal in place.
There is little economic news coming out the US today or tomorrow which could mean that the greenback will follow in the same trend as the rest of the week. Although, there is the unemployment figures being released and this is the first major data release of the year for the US, the number of claims is predicted to fall which would be a good sign for the future of the dollar as it shows the genral health of the economy before the actual statistics are realised in the future.
New president Joe Biden has been very busy in his first 22 days as president trying to get the US back on its feet such as his ‘buy American’ campaign which is trying to reduce the amount of offshore work and putting more money into the US economy which he hopes will increase the amount of jobs and in turn could have a positive effect on the dollar. The stimulus checks have been agreed and the 1,400 dollar pay outs will be even more accessible than the last two rounds of stimulus were, with anyone who earns under 75K a year able to apply for one which should mean that there won't be, according to one census, 3.5 million adults missing out on the money they need and to hopefully give the economy the boost it needs to keep going until there is an end goal in place.
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