Pound (GBP) Steadies as UK Markets Become More Cautious

Published: 10 Mar at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Australia, New Zealand, USA,

Pound (GBP)

The Pound (GBP) stabilised against many of its peers today owing to a dearth of UK economic data.

However, confidence in the UK economy remains high as the nation is set to cautious ease lockdown measures over the next few months.

However, Bank of England (BoE) Governor Andrew Bailey warned that the economy would not return to a pre-Covid state but added that he now sees a light at the end of the tunnel.

Mr Bailey said:

‘There are reasons to believe that so-called long-term scarring damage to the economy will be lower than in past recessions. If I had to summarise the diagnosis, it's positive but with large doses of cautionary realism.’

Euro (EUR)

The Euro (EUR) struggled today following yesterday’s underwhelming Eurozone GDP figure for the final quarter of last year. 2020’s fourth quarter saw the GDP figure fall below forecasts by -0.7%.

Analysts at Reuters said:

‘The Eurozone economy contracted more than previously estimated in the last three months of 2020 against the previous quarter, revised data showed on Tuesday, as household consumption plunged because of COVID-19 lockdowns.’

As a result, EUR investors are remaining cautious as the Eurozone’s economic recovery will likely be delayed by the EU’s delay in rolling out Covid-19 vaccines earlier this year.

US Dollar (USD)

The US Dollar fell against many of its peers because of a sharp drop in US Treasury yields. Added to this, improved risk-sentiment has also limited demand for the safe-haven ‘Greenback’.

US Dollar investors will be awaiting today’s publication of the US Consumer Price Index, which is expected to rise by 0.2%.

Any further signs that US President Joe Biden’s $1.9 trillion stimulus plan could succeed in its final US vote would also limit demand for USD.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) suffered today owing to retreating risk appetite. Renewed demand in the ‘Greenback’ has therefore limited the NZD exchange rate.

Australian Dollar (AUD)

The Australian Dollar has been limited by softening demand for risky assets this week. The Eurozone’s slow recovery has added to global market caution, denting the AUD exchange rate.

As of Wednesday, 10th March 2021, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1682, GBP USD exchange rate was 1.3931, GBP AUD exchange rate was 1.802, and GBP NZD exchange rate was 1.9371.

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