- Pound (GBP) shows strength as business confidence rises firmly
- BoE Governor Andrew Bailey’s speech
- ECB’s Philip Lane also to speak at Jackson Hole
- German & Eurozone consumer confidence data in focus
The Pound Euro (GBP/EUR) exchange rate is advancing for a fourth consecutive session. The pair settled in positive territory on Thursday +0.01% at €1.1164. At 05:15 UTC, GBP/EUR trades +0.1% at €1.1176, gaining 0.7% across the week so far.
The Pound has shown resilience this week, moving higher despite growing Brexit concerns with some reports suggesting that talks could be on the brink of collapse. Worries over the health of the UK labour market have also been brushed off. This week two separate surveys from the Confederation of British Industry highlighted the huge number of jobs that have been lost from the retail sector and more broadly from the service sector.
On a more upbeat note, UK business confidence has ticked higher. The Lloyds business barometer gained 8 points, the largest monthly jump in three years whilst optimism surrounding the economy and trading prospect improved. This data comes after PMI data last week showed that the economic recovery in the UK was gradually gathering pace.
Attention will now turn towards Bank of England Governor Andrew Bailey who is set to speak at the first virtual Jackson Hole event.
Investors will be listening closely for any further clues over negative interest rates. Earlier this month Andrew Bailey said that negative rates had been in the BoE’s toolkit, although he said he doesn’t have a plan to use them.
The European Central Bank’s Chief economist Philip Lane is also due to speak at the Jackson Hole symposium. There is also a deluge of Eurozone data for investors to get their teeth into.
German GFK consumer confidence is expected to tick higher in September. Recent data from Germany indicates that the economy on the road to recovery there.
Eurozone economic sentiment will also be under the spotlight. Again, analysts are expecting morale to have picked up further. However, rising coronavirus cases, particularly in Spain and France, could keep any gains in the common currency limited.