As Monday started, the Pound found itself fluctuating following the continued concern over the latest coronavirus strain news and Brexit problems. While the vaccination rollout is gathering momentum, there is now a concern that the AstraZeneca vaccine might prove less effective against the South African variant.
Along with this, a drop in exports to the EU also weighed heavily on the currency. While the continued vaccine rollout should boost the Pound moving through the week, it finished Monday at 1.1405 against the Euro and 1.13745 against the US Dollar according to the Foreign Exchange Market.
The Euro held firm yesterday despite German industrial production figures being lower than expected. Some support came from the correlation with the Euro and US Dollar pairing as the US Dollar weakened. However, any gains could be tempered by the lack of speed at which vaccinations are being rolled out across Europe.
The US Dollar lost ground yesterday following a reaction from Treasury yields as they dropped from their 11-month highs. Risk appetite improved too and this also meant that the Greenback lost support as demand dropped. The US stimulus package that’s progressing through US congress is increasing risk appetite and increasing expectations of an increase in inflation.