Pound Sterling Dips, but Barclays Look to Buy it against the Euro

The Pound-to-Euro exchange rate reached new one year highs above 1.18 to open the new week and was close to the middle of a 1.17-to-1.20 trading range that could be set to define price action for Sterling during the weeks ahead.

The Pound-to-Euro exchange rate reached a new two-year high last week and may be likely to establish a more durable foothold above 1.17 over the coming days as divergence between the UK and Eurozone economies remains top of mind among investors. 

The Pound-to-Euro exchange rate reached one-year highs this week, at or above which it's likely to remain in the months ahead, according to new forecasts from Rabobank.

The British Pound caught a bid against the Euro, Dollar and most other major currencies ahead of the weekend in a move that defied a softer stock markets and concerns for future supplies of covid-19 vaccines into the UK.

The British Pound is up 4.50% against the Euro already this year courtesy of a combination of faded Brexit-linked risks and expectations for a strong vaccine-lead economic rebound over coming months, developments that underpin a strong technical picture that continues to advocate for further gains.

A proposed ban or limit on vaccine exports to the UK from the EU has been credited by numerous foreign exchange analyst we follow as being behind a recent decline in the value of the British Pound, however such a move is being overblown says Stephen Gallo, European Head of FX Strategy at BMO Capital Markets.