- Pound (GBP) after Boris Johnson relaxes lockdown measures further to help save the economy, but is criticised for easing 2-meter rule
- UK PMI data showed contraction in output is slowing in June
- Euro (EUR) investors look ahead to German IFO Business Sentiment data which is expected to continue rebounding from April’s low.
- Pound Euro exchange rate
The Pound is mildly lower versus the Euro in early trade on Wednesday. The Pound Euro exchange rate settled on Tuesday flat higher at €1.1071, after rebounding off a 3-month low of €1.1015.
At 05:15 UTC, GBP/EUR is trading -0.1% at €1.1061 as investors continuing digesting latest easing of lockdown measure in Britain, whilst looking ahead to German IFO sentiment data.
Boris Johnson announced that pubs, restaurants and hotels can open as from early July, as he continues to reopen the UK economy following the coronavirus shutdown. Hairdressers and theme parks will also reopen, however indoor gyms, swimming pools and nightclubs will remain closed. The Prime Minister has come under pressure from businesses, especially in the hospitality sector, and members from his own party to reignite the economy.
The easing of lockdown restrictions come after closely watched activity data for the service sector and the manufacturing sector showed that the contraction in these sectors was slowing as the British economy continued to pull back from April’s nadir.
Today the UK economic calendar is quiet so sentiment could be the driving force behind sterling.
The Euro traded mixed versus its major peers despite impressive PMI data from across the region, with France even showing activity output expanding in both the service sector and the manufacturing sector.
Today investors will remain focused on the economic calendar with IFO German business sentiment under the spotlight. Analysts are expecting German businesses to become more confident about the outlook for the rest of the year, an encouraging sign for the economy.
The German economy started reopening several weeks ago with children returning to school, shops and restaurants re-opening, but all with social distancing rules. The German reopening has been closely watched and the fact that German authorities in the state of North Rhine-Westphalia have reimposed lockdown restrictions after a spike in cases is keeping risk sentiment in check.