The Pound Sterling is seen to have the potential to strengthen against the Euro at the moment. This optimism is underpinned by the growth of the U.K. economy which is showing more positive signs as the economic sector there began to open up gradually after the curfew was lifted from time to time.
This confidence was expressed by the Governor of the Bank of England where Andrew Bailey made a statement stressing that he is confident the U.K. economy will be more positive in the coming months. He also mentioned that the Bank of England will continue to play an important role in helping the U.K. economy out of the recession caused by the Covid-19 pandemic.
The Bank of England approved several injections of economic stimulus recently causing inflation levels to rise again and is targeting to reach 4% or 5% by the end of the year.
The Covid-19 pandemic situation is also seen to be improving with the number of daily cases recorded showing a significant declining trend after the European country started a vaccination program and strictly enforced curfew orders to control the spread of cases among the people. Yesterday's death also recorded the lowest number since October 2020.
Investors and currency traders are currently seeing trading opportunities available on the GBP currency. This confidence is based on several factors such as a positive economic recovery phase, the downward trend of Covid-19 pandemic cases and lower prices against the Euro at this time.
The situation is different in Europe where the third wave of Covid-19 is reported to have hit countries such as France, Germany and Poland. This situation will certainly be seen as a threat to investor confidence in the potential of the Euro currency and will choose GBP as the latest alternative.