GBP/EUR Exchange Rate Favours Pound as Eurozone Data Disappoints, UK Gears Up for ‘Freedom Day’
The GBP/EUR exchange rate continues to see the Pound rise against the Euro as GBP bullishness over scheduled UK reopening aligns with poor Eurozone data.
At the time of writing, the Pound is trading at €1.1696, virtually unchanged from today’s opening rate.
Euro (EUR) to Remain Muted on Recent Data Disappointment?
The Euro (EUR) succumbed to downside pressure this week as successive Eurozone data releases printed lower than expectations. The single currency has failed to rally through today’s session as a risk-off sentiment prevails.
As FXStreet reports, ‘the German Industrial Production added to the April’s pullback and contracted 0.3% MoM in May. These results came in line with Tuesday’s loss of momentum in the Economic Sentiment in both Germany and the broader Euroland.’
Without any positive stimuli to counteract this morning’s poor German Industrial Production figures, EUR seems set to trend lower into tomorrow’s session. The next significant data release concerning the Euro isn’t until next week, as Germany publishes their latest inflation figures.
In the meantime, the Euro may recoup some gains if this evening’s Federal Open Market Committee minutes betray a dovish tone, against expectations. A relapse in US Dollar (USD) trading confidence could bolster EUR via its negative correlation with USD.
Pound (GBP) to Continue Upward Trajectory as 19 July Approaches?
The Pound (GBP) is hovering today around the 1.671 mark, holding onto this week’s opening level as UK spirits remain high. Boris Johnson confirmed on Monday that the final set of coronavirus restrictions will be lifted on 19 July; although this plan is subject to continuing vaccine efficacy, it seems unlikely that any impediments will arise.
Economic growth incumbent upon social gathering will soon be within reach as July 19 draws closer, fuelling further optimism. Health secretary Sajid Javid supports the Prime Minister’s foregrounding of the economy as well as the population’s overall health and education, all of which have suffered while the coronavirus response took priority. ‘We can’t live in a world where the only thing we are thinking about is COVID’, said Javid yesterday; ‘we have to make use of a vaccine that is thankfully working.’
Later in the week, Friday’s UK GDP figures for May’s three-month average have potential to drive Sterling sentiment higher still, if they meet the 3.9% rise expected. As the economy has benefitted from gradual reopening these past few months, there seems little reason to doubt optimistic predictions.