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Pound (GBP) Rises as UK Inflation Rebounds on Climbing Fuel Prices

Published: 21 Apr at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, India, Japan,

Pound (GBP)

The Pound (GBP) showed signs of recovery today as UK markets are becoming more optimistic about the state of Britain’s economy. Employers have now begun rehiring following months of begin unable to open due to Covid-19 lockdown restrictions.

As a result, GBP investors are more hopeful that the economy could begin to recover as the joblessness crisis is remedied by the reopening of non-essential shops.

Meanwhile, the latest UK inflation data for March showed a rebound thanks to rising fuel prices.

Consequently, this has provided some cheer in the UK economy, which continues to show a steady recovery following the easing of some lockdown restrictions.

Euro (EUR)

The Euro (EUR) suffered today because of renewed demand for the safe-haven US Dollar. The single currency is negatively correlated to USD, so any rise in the US Dollar tends to be EUR-negative.

Covid-19 cases are continuing to rise in Japan and India, sparking demand for the safe-haven US Dollar and limiting the appeal of the single currency.

However, EUR investors are steadily becoming more confident about the European Union’s (EU) rollout of Covid-19 vaccines.

The European Medicines Agency (EMA) has been affirmative about the Johnson and Johnson vaccine rollout. This has boosted confidence in the EU’s vaccine rollout which could significantly help the Eurozone economy’s recovery in the next few months.

US Dollar (USD)

The US Dollar (USD) stabilised today because of souring risk sentiment. With rising coronavirus cases in Japan and India, demand for the safe-haven currency has increased.

A modest pickup in US Treasury yields has also contributed to the ‘Greenback’s strength today, despite being below their recent 14-month high.

Looking forward, USD traders will continue monitor global economic sentiment and Treasury yields.

Any signs of souring risk sentiment on rising Covid-19 numbers would boost US Dollar.

Canadian Dollar (CAD)

The Canadian Dollar (CAD) has been treading water ahead of the Bank of Canada’s (BoC) interest rate decision later this afternoon.

However, with no policy changes expected, CAD traders will be awaiting the BoC’s economic outlook.

Any dovishness about the outlook for the Canadian economy would be CAD-negative.

Australian Dollar (AUD)

The Australian Dollar (AUD) has struggled from souring risk-sentiment today, with the risk-sensitive ‘Aussie’ struggling from concerns over rising Covid-19 rates in Japan and India.

However, Australian markets are becoming more optimistic about the nation’s economy. Australian Retail Sales figures, which beat forecasts at 1.4%, has helped buffer some of the AUD’s losses.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) has benefited from stronger-than-expected CPI data, which showed a robust recovery in the first quarter of this year.

As of Wednesday, 21st April 2021, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1573, GBP USD exchange rate was 1.3928, GBP AUD exchange rate was 1.7964, GBP NZD exchange rate was 1.9335, GBP CAD exchange rate was 1.7416, GBP INR exchange rate was 105.055, and GBP JPY exchange rate was 150.4643.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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