EUR/GBP stabilises just below 0.8600 as BoE policymakers fail to rock the boat

  • EUR/GBP has fallen again and is now under 0.8600 as GBP continues to benefit from vaccine/reopening optimism.
  • BoE policymakers spoke before the UK Parliament Treasury Select Committee, but largely failed to rock the boat.

EUR/GBP was choppy amid thin volumes during Asia Pacific trade, seeing a sharp sell-off to set fresh multi-month lows under the 0.8550 mark despite a lack of any fundamental catalysts to drive the downside at the time. The pair has since recovered from lows, but has struggled to break meaningfully back above the 0.8600 level and is currently trading in the 0.8580s, down about 0.2% or just under 20 pips on the day.

Driving the day

GBP continues to confound analyst fears that it may have entered overbought territory and continues to march higher versus the euro. Sterling continues to benefit from reopening and fast vaccine rollout-related optimism. As of 23 February, the UK had given 27.3 out of every 100 of its adult citizens at least one vaccine. That compares to the comparatively sluggish Eurozone rollout; Germany has administered just 6.4 vaccines per 100 adults, Spain 6.8, Italy 6.1 and France 5.9.

It looks as though vaccines work; the average age of hospitalised Covid-19 patients in Israel has been plummeting as the elderly were prioritised in the country’s vaccine rollout and independent reports based on real-world data show the Pfizer and AstraZeneca vaccine significantly reduce the probability of transmission and hospitalisation. Thus, the UK stands in good stead to be able to confidently reopen its economy ahead of the European mainland. Meanwhile, compounding concerns about the EU’s sluggish vaccine rollout is news this morning that AstraZeneca, which already cut vaccine deliveries to the EU in Q1 by 60%, is to deliver less than 90M Covid-19 shots to the EU in Q2, at least 50% below its contract commitments.

BoE policymakers speaking at the UK parliament

Bank of England policy makers have been speaking before the Parliamentary Treasury Select Committee about the bank’s recently released Monetary Policy Report (MPR). For reference, in the latest MPR, the bank forecast a 4% drop in Q1 2021 GDP, but for full-year 2021 GDP to rise 5% (downgrade from 7.25%), then rise 7.25% in 2022 (upgrade from 5.0%), followed by a 1.25% rise in 2023 (unchanged). Meanwhile, the bank forecast that Consumer Price Inflation would be 2% in 2021, 2.25% in 2022, before dropping back to 2.0% in 2023.

BoE Monetary Policy Committee members spoke about some of the upside and downside risks to the economy. In terms of the latter; Governor Andrew Bailey expressed concern regarding potential financial stability risks if the EU tried to force institutions to localise some operations in the EU. Jonathon Haskell noted risks to do with increased corporate bankruptcies and highly transmissible Covid-19 variants. Meanwhile, Ben Broadbent noted the risk that unemployment rises once the government’s furlough scheme is withdrawn. Turning to the upside risks, Haskell noted that a faster than expected vaccine rollout presents upside risks.

While it is interesting to hear from the BoE as to the risks, they have their eyes on, policymaker’s comments to the Treasury Select Committee appear not to have shifted the dial for GBP at all, given that policymakers did not say much about policy. Right now, it appears likely that negative interest rates will only be implemented in the case of some of the aforementioned downside risks materialising, or if the post-Covdi-19 economic recovery disappoints the BoE’s expectations by a sufficiently wide margin.


Today last price 0.8589
Today Daily Change -0.0018
Today Daily Change % -0.21
Today daily open 0.8607
Daily SMA20 0.8751
Daily SMA50 0.8887
Daily SMA100 0.8952
Daily SMA200 0.8992
Previous Daily High 0.8654
Previous Daily Low 0.8606
Previous Weekly High 0.8751
Previous Weekly Low 0.864
Previous Monthly High 0.9085
Previous Monthly Low 0.8812
Daily Fibonacci 38.2% 0.8624
Daily Fibonacci 61.8% 0.8636
Daily Pivot Point S1 0.8591
Daily Pivot Point S2 0.8575
Daily Pivot Point S3 0.8543
Daily Pivot Point R1 0.8638
Daily Pivot Point R2 0.867
Daily Pivot Point R3 0.8686



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Get Weekly Crypto trade ideas!  
Empower yourself with the best market insights

Join FXStreet Premium!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD stabilizes after US retail sales smash estimates

EUR/USD has bounced off its lows but remains below 1.20 after US retail sales smashed estimates with a 9.8% leap. Moreover, jobless claims tumbled to 576,000. Markets are digesting the big bulk of data.


GBP/USD rises toward 1.38 ahead of Brexit meeting

GBP/USD maintains a cautious approach below 1.3800, accumulating minor losses. Global risk uncertainties weigh on the pair. Investors await the Brexit meeting on the NI issue.


ETH seizes the spotlight as BTC and XRP contemplate retracement

Bitcoin price shows a correction in play after the MRI flashed a red ‘one’ cycle top signal. Ethereum shows a strong trend continuation while the rest of the market experiences a minor pullback. 

Read more

XAU/USD jumps above $1,760 amid slumping US T-bond yields

Gold extended its daily rally beyond $1,760 on Thursday. 10-year US Treasury bond yield is down more than 4% on the day. US Dollar Index falls into the negative territory below 91.60.

Gold News

Citi (C) beats on EPS and revenue, investment banking booms!

Citigroup (NYSE:C) reports Q1 2021 earnings showing strong growth in investment banking following on from Goldman smashing it on Wednesday. Citi shares are trading $74.20 in pre-market up nearly 2%.

Read more