22/03 –  EU/UK vaccine row roils both currencies

22/03 – EU/UK vaccine row roils both currencies

GBP: No delays to supply yet

EUR: Not in its prime

USD: Bid up on multiple factors


The disagreement between the UK and EU over the provision of the AstraZeneca vaccine is getting more and more nasty. Overnight, EU sources briefed journalists that should Britain try to get hold of AstraZeneca vaccines made at a Dutch plant run by a sub-contractor, then the EU would block the exports.

The mess is compounded by the knowledge that the UK has not asked for these jabs and that all jabs currently made at this plant have not yet been certified for use in the EU. This may not matter; polling by YouGov suggests that the damage has been done and near 60% of French people surveyed believe the AZ vaccine to be unsafe despite an overnight release from the US saying it is perfectly safe and effective.

With the UK managing to break daily vaccination records on Friday, Saturday and Sunday, sterling will remain supported by the program until supply concerns become more apparent. Sterling movement is also likely to remain tied to the wider risk environment.


The single currency has been tagged a little by the issues in Turkey; Turkish and European banks (especially in Germany) are quite highly integrated and the moves over the weekend will have knocked sentiment in both.

Likewise the vaccine blockade which may only be political currently, will not help matters in the short term should the rhetoric increase.

US dollar

The dollar is a hair stronger this morning with various news items coming together to push traders into looking for further safety in haven assets. The news out of Turkey – summarised below – alongside vaccine problems in Europe and reports of “aggressive cyber-attacks” between the US and Russia have taken some of the shine of risk assets.

With the focus for currency markets remaining squarely on the ability of the US central bank to let yields on its debt rise without stoking belief that the stimulus it is providing to the US economy is running out, notes from Fed members and bond auctions are crucial this week.

The US auctions debt repaid after 2, 5 and 7 years on Tuesday, Wednesday and Thursday respectively and it is here where we could see further pressures on interest rates and a stronger USD.


The Turkish lira fell by as much as 15% at the open last night following the weekend’s news that Turkish President Erdogan had fired the country’s central bank governor after he raised interest rates last week. He has installed an economist who believe that raising interest rates creates inflation, not controls it – the opposite is true – and as such, the market is now pricing in cuts from the central bank in the coming months.

The Turkish lira had been the best performing currency globally once the interest gained from holding it was taken into account- that is no longer the case and we expect further moves to record lows.

Market rates

Today’s interbank rates at 08:21 against sterling. Movement vs yesterday.

Euro€1.165 ↓
US dollar$1.385 ↓
Australian dollar$1.794 ↓
South African randR20.53 ↓
Japanese yen¥150.6 ↓

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Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.