- Pound (GBP) boosted by reopening optimism
- UK manufacturing PMI in focus
- Euro (EUR) sees slew of data releases this week
- German inflation in focus
The Pound Euro (GBP/EUR) exchange rate is advancing on Monday extending gains from last week. The pair rose 0.2% across the week after experiencing a 1% selloff on Wednesday and settled on Friday at €1.1559 at the high of the day. Although the pair did manage to book an impressive 2.4% rally across the month of February. At 05:15 UTC, GBP/EUR trades +0.25% at €1.1570.
The Pound climbed in the early part of last week on reopening optimism after Prime Minister Boris Johnson lay out the road map to reopening the UK economy. Whilst the prospect of the UK being one of the first economies to reopen thanks to a rapid vaccine rollout, lifted the Pound, signs that Sterling was overbought and a mover out of riskier currencies mid week saw investors booked profits and GBP struggle to hold onto its best levels.
This week the UK economic calendar is quieter which means that covid developments and sentiment are likely to be influential factors ahead of Chancellor Rishi Sunak’s 2021 Budget on Wednesday.
The Chancellor is expected to announce fresh stimulus to help support the economy in what will hopefully be the final stages of the pandemic.
Today investors will look to the release of UK manufacturing PMI the final reading for February, which is expected to tick higher to 54.9, up from 54.1. The level 50 separates expansion from contraction.
The Euro could be well supported this week should the slew of macro data which is due to be released come in better than expected. Eurozone PMI data for February will be published as well as German retail sales, unemployment and Eurozone inflation on Tuesday. Whilst Thursday sees the release of Eurozone retail sales and unemployment figures.
Today sees the release of German inflation data for February. The preliminary reading is expected to show 0.5% increase month on month, down slightly from 0.8% in January. On an annual basis inflation is expected to climb higher to 1.2%, up from 1%.