EU Astrazeneca scepticism weighs on vaccine programme

The EU’s coronavirus vaccine response has been notoriously slow in comparison to the UK and US. However, vaccine deployment rates in the Eurozone have come under pressure once again due to scepticism over the Oxford-AstraZeneca vaccine.

Thousands of Oxford-AstraZeneca jabs have been left unused in Germany, with many refusing to take it following fears for the efficacy of the vaccine. On Friday it was reported that just 150,000 doses had been used out of the 1.5 million that were ordered.

German Health Minister, Jens Spahn stated “I won’t allow tens of thousands of doses to lie around on our shelves while millions of people across the country are waiting to be immunised.”

It’s been reported that out of the 3,800 daily appointments scheduled at the Tegel vaccination centre in Berlin, which only deploys the Oxford-AstraZeneca vaccine, only around 200 people have been attending their vaccination appointments. The discovery of unused vaccines prompted the European Commission to encourage European states to assure people that the Oxford-AstraZeneca vaccine is safe and effective. Previously, French President Emmanuel Macron and Commission President, Ursula Von Der Leyen had expressed their doubt over the vaccine and have been accused of scaremongering and contributing to the scepticism.

People’s refusal to take the vaccine across the Eurozone has created another setback for the EU’s quest for immunisation against the coronavirus. The UK has vaccinated around 26% of the population so far in comparison to less than 6% in Germany.

British Pound sustains 10-month highs against the Euro

The UK’s abilities to administer coronavirus vaccines at a rapid rate has led to the British pound (GBP) to soar against some of its major currency competitors. The British pound to euro (GBP/EUR) exchange rate has sustained the 10-month high experienced last week and has opened the new trading week at EUR 1.16.

With the outlook for the UK economy becoming increasingly more optimistic, economists have predicted that the British pound to euro (GBP/EUR) exchange rate could advance to EUR 1.17 – EUR 1.20 imminently. The upward trajectory of the currency pairing could see the British pound (GBP) return to pre-Brexit levels in the not too distant future.

Shaun Osborne, chief FX strategist at Scotiabank stated “GBP has quickly become a market favourite owing to the UK’s quick pace of inoculations” though went on to remark that “attention may eventually turn toward other currencies – the euro (EUR) and Canadian dollar (CAD), for instance, as laggard countries accelerate their vaccination drive.”

GBP/AUD and GBP/NZD steady after last week’s plunge

The British pound (GBP) may be one of the best performing currencies so far in 2021, but Sterling has recently lost ground against both the Australian dollar (AUD) and New Zealand dollar (NZD).

Last week saw the British pound to Australian dollar (GBP/AUD) exchange rate reach AUD 1.80 before a surge in demand for the ‘Aussie’ currency caused sterling to plummet to AUD 1.78 during the end of the trading week.

Tomorrow will see the release of the Australian job market report. Upbeat figures could raise demand for the Australian dollar even further.

The British pound to New Zealand dollar (GBP/NZD) exchange rate followed a similar journey last week, seeing the currency pair rise to NZD 1.94 before slipping to NZD 1.92 a day later.

However, both exchange rates have held steady at the beginning of the new trading week, ahead of positive comments from UK Prime Minister, Boris Johnson regarding plans to exit the UK lockdown.

Outlook for the New Zealand economy is particularly optimistic given the extremely low levels of new coronavirus infections and having begun its vaccination programme. Further positive data is expected later today as retail sales for Q4 2020 are revealed. Data is expected to show a rise of 26.7%, much more positive than the likes of the UK and Canada, both of whom have seen a substantial decrease in recent retail sales.

British Pound supported by Boris Johnson’s lockdown exit comments

It’s likely that the current strength of the British pound (GBP) will continue following comments from UK Prime Minister Boris Johnson regarding exiting UK lockdown. Economists were wary that if the roadmap out of lockdown was too cautious, that this could cause Sterling to slip against its currency competitors.

The Prime Minister acknowledged that there will always be risks regardless of when lockdown is lifted and that there is no route to a zero-COVID Britain. Restrictions will begin to be lifted in March, seeing the return to schools, with the aim for all restrictions to be lifted from June.

Whilst coronavirus remains a substantial threat to the UK, over 17.5 million people have been vaccinated so far. Mr Johnson revealed that one dose of the Pfizer vaccine is 75% effective at reducing hospital admissions. He was not able to precisely comment on the effectiveness of the Oxford Astra-Zeneca vaccine due to its later rollout date but that it offered a ‘good level’ of protection.

With the potential re-opening of non-essential businesses and services from April, such as hairdressers, it’s thought that the UK economy will see a much swifter recovery than initially anticipated.