Pound Slides Amid Vaccine Spat Between EU, U.K.
The pound weakened against its major counterparts in the
European session on Tuesday, as tensions between the European Union
and the U.K. intensified after the bloc threatened to ban
AstraZeneca's vaccine exports to other countries.
European Commission President Ursula von der Leyen said that the
firm had the obligation to fulfil the demands of Europe and she
will forbid planned exports this week in order to abide by the
contract with Europe.
The U.K. government is trying to ease tensions as an EU export
ban could slow its vaccination programme.
EU leaders are meeting on Thursday to decide whether or not to
block exports to the UK.
European stocks dropped as German Chancellor Angela Merkel
extended the current lockdown to control another wave of
Data from the Office for National Statistics showed that the UK
unemployment rate dropped unexpectedly in three months to
The unemployment rate came in at 5.0 percent in three months to
January, below economists' forecast of 5.2 percent and 5.1 percent
seen in three months to December.
The pound dipped to near 3-week lows of 0.8645 against the euro
and 149.08 against the yen, after rising to 0.8598 and 150.88,
respectively in early deals. The pound is poised to challenge
support around 0.88 against the euro and 145.00 against the
The pound fell to a 1-1/2-month low of 1.3752 against the
greenback, from a high of 1.3864 seen at 7:00 pm ET. If the pound
falls further, it is likely to test support around the 1.33
The U.K. currency was down at 1.2778 against the franc, pulling
away from its previous high of 1.2854. The pound may locate support
around the 1.24 level.
Looking ahead, U.S. new home sales for February are scheduled
for release in the New York session.
At 10:00 am ET, Federal Reserve Chair Jerome Powell will testify
before the House Financial Services Committee on the CARES Act,
along with Treasury Secretary Janet Yellen, via satellite.