- Pound (GBP) rallied on Brexit optimism as Boris Johnson to meet Ursula von de Leyen
- Final round of Brexit talks prior to key June deadline start today
- EZ manufacturing PMI misses forecast
- At 06:15 UTC, GBP/EUR is trading flat at €1.1222. Real time exchange rate
The strong note surround the Pound saw the Pound Euro exchange rate rally 1% in the previous session, setting on Monday at €1.1222 after UK manufacturing data printed inline with expectations whilst, the Eurozone fell short.
At 06:30 UTC, GBP/EUR is trading +0.01% at €1.1222 as Brexit remains very much in focus.
The Pound surged in the previous session as the UK entered into the next phase of easing lock down restrictions. With primary schools and some shops reopening investors were feeling more confident about the economic recovery.
UK manufacturing data brought no surprises with the contraction in activity easing in May, in line with the preliminary reading.
Brexit continues to linger with the focus on the UK – EU trading relationship. News that Boris Johnson is planning to meet with European Commissioner Ursula von der Leyen later this month in an attempt to unblock trade negotiations boosted sterling. The broad hope is that the two leaders will inject political momentum into the process. The plans were revealed as UK officials warned that the negotiations shouldn’t stretch on into the Autumn.
There is no high impacting UK data, investors will remain focused on Brexit as the final round of talks before the key June deadline begin. The deadline at the end of the month is the last moment which either side can request an extension to the transition period. Although the UK have reiterated on several occasions now that there is no interest for an extension. This leaves a cliff edge hard Brexit very much on the table.
The Euro traded on the back foot in the previous session and remains subdued in early trade on Tuesday, following weaker than forecast manufacturing activity data. Whilst May’s finalised Eurozone manufacturing PMIs showed an improvement from the record lows seen in April, they were still short of what analysts had had been expecting.
The data showed that whilst factories in Europe had started to resume operations as lockdown measures ease, demand was still weak keeping new orders low.
There is no high impacting Eurozone data today. Investors will continue to focus on lockdown easing measures ahead of the European Central Bank meeting later in the week.
