• Surprise resignation of Sajid Javid last week
  • GBP gains are likely to remain capped
  • UK labour data in focus on Tuesday
  • German GDP below expectations

The pound pushed firmly higher versus the euro across the previous week.

GBP/EUR – the pound gained every day against the common currency, rising a solid 2.2%., more than making up for the 1% loss experienced in the first week of February.

The pound received a strong boost last week following the surprise resignation of Sajid Javid

Sajid Javid was replaced by Rishi Sunak. Market participants view the move as a power grab by No. 10 Downing Street onto No.11. With Boris Johnson now expected to exert greater control over the Treasury an expansionary fiscal is now more likely. This is especially important given that the Budget is due next month.

Despite the domestic political boost to the pound, any gains are likely to remain capped, especially given that the EU are showing signs of looking to adopt a harder stance in upcoming trade talks.

Whilst there is no high impacting UK economic data due for release today, UK labour data and wage figures will be in focus on Tuesday and weaker inflation could weigh on the pound on Wednesday.

GBP/EUR – German GDP below expectations showing that the economy stagnated

The euro trended lower versus its major peers over the past week as anxieties grow over the health of the eurozone and more particularly the German economy. At the end of last week, the German GDP fell short of expectations showing that the economy stagnated. Whilst the largest economy in Europe avoided a contraction, it shows a sustained decline in momentum with few signs of picking up.

Concerns over the state of the German economy could pick up this week as investors look ahead to ZEW sentiment index. Any signs of a decline in business confidence could weigh heavily on demand for the euro, with weaker sentiment pointing to limited economic activity. Investors are already wary of a contraction and potential recession in Germany, weak confidence data could fuel these concerns.

These fears are only likely to intensify when taking into account the impact of coronavirus on the German economy. As Germany is a manufacturer and exporter nation, it is more vulnerable to the economic spillover from Coronavirus. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.