The Pound-to-Euro exchange rate was resilient as the risk assets hit a global bond market speed bump that unsettled investors following Sterling’s barnstorming rally to one-year highs, which will be back in prospect this week as the dust settles and domestic focus turns to Chancellor Rishi Sunak’s budget.
The British Pound has recorded its first daily loss against the Euro in two weeks after a strong rebound in the Eurozone's single currency, although analysts at CitiFX say they maintain a preference for Sterling upside.
The British Pound hit 11-month highs against the Euro over the duration of the previous 24 hours amidst a renewed pulse of buying and one analyst says 1.20 is now in the frame, but there is also a flashing warning sign indicating the Pound is now overbought.
Pound Sterling rallied sharply during the mid-week Asian session and is holding the gains in London trade in am move that has opened fresh new multi-month highs, but the gains have left analysts scratching their heads as to why the currency is rising.
A weakening Euro has allowed the British Pound to push to its highest levels since April 2020, but one major foreign exchange analyst we follow is warning that the UK currency is beginning to look overvalued against the Eurozone's single currency.
The Pound-to-Euro exchange rate took the market by storm having risen to nine-month highs last week but could continue steamrolling higher into month-end, leading to a test of 1.17 in the process, as the UK economic backdrop brightens and Sterling proves popular among central bank reserve managers.
Pound Sterling extended its 2021 lead over a range of currencies including the Euro last week but could continue to confound market expectations over the coming days, as it plays an integral role in a broader uplift of European currencies, with nine-month highs above 1.15 now in the pipeline.