- Footfall numbers indicate pent up consumer demand as stores slowly reopen.
- Brexit talks saw little progress could limit Pound (GBP) gains
- Eurozone confidence data to fall gain in June could drag on Euro (EUR)
- At 06:15 UTC, Pound to Euro (GBP/EUR) trades at €1.1256
The Pound is bounding higher at the start of the new week, extending gains from last week. The Pound Euro exchange rate settled of Friday over 1% higher at €1.1222, putting gains across the week at 0.9%.
At 06:15 UTC, GBP/EUR is trading +0.3% at €1.1256.
The Pound pushed higher last week as investors focused on the continued easing of lockdown restrictions and reopening of the UK economy. The number of British shoppers in early June suggest that there is huge pent up demand amongst shoppers in physical stores. According to market researcher Springboard, footfall has strengthened noticeably over the past few weeks. Whilst some shops are open, all shops are due to reopen on 15th June.
Brexit concerns continue to linger and could limit gains in sterling. Last week, any reported desire from either the EU or UK to compromise failed to materialise leaving a cliff edge, no trade deal Brexit very much on the table. Boris Johnson has stuck to his stance of refusing an extension to the transition period.
UK data is in short supply at the start of the week, with little in the way of high impacting data to drive the Pound. This is expected to change on Friday with the release of monthly GDP data and manufacturing and industrial production numbers.
The Euro has remained well support by not only the reopening of countries across the region, but also the €750 billion rescue package announced by the European Commission at the end of May. The rescue package will remain under the spotlight this week and be a key topic of discussion at the Eurogroup’s meeting on Thursday.
The path to agreement over the fund to support those countries moat affected by covid-19 is expected to be a rocky one. Finland, for example, has already said that it will reject the proposal in its current form. The Eurogroup is expected to prepare the way for the plan to de discussed at the EU head of state meeting of the European Council on 19th June.
Today investors will be focusing on the release of German industrial production and Eurozone sentix investors confidence data. Analysts are expecting sentiment to have dropped lower in June, which could drag on the value of the common currency.
