- Pound (GBP) fails to gain traction this week after last week’s steep selloff
- No high impacting data today but hobs, CPI and retail sales next week
- Euro (EUR) resumes move higher
- Eurozone trade balance & CPI
The Pound Euro (GBP/EUR) exchange rate is edging lower paring gains from the previous session . The pair settled 0.1% higher on Thursday at €1.1515 snapping a two-day losing streak. At 05:15 UTC, GBP/EUR trades -0.1% at €1.1503. Across the week the pair is set to trade flat, after steep 2% losses the week before.
The Pound has struggled to gain traction this week despite the outlook for the UK remaining strong. After an impressive first quarter to the year, investors have been hesitant to buy into the Pound after its steep decline last week.
Britain’s economy is reopening, but that has now been priced in so there a few surprises to the upside surrounding the reopening narrative.
However, concerns over Brexit have been creeping in. Particularly issues surrounding the northern Ireland border in addition to rising concerns over Scottish Independence. Both of these issues are on investor’s radar and could be dampening demand for sterling.
There is no high impacting UK data today so investors will likely be looking ahead to UK jobs data, inflation figures and retail sales next week.
PMI data for both the UK and the Eurozone will be published next week and should provide a clearer picture as to how the recovery in each region is progressing.
The Euro traded lower across the board on Thursday, after a strong couple of sessions as optimism is growing that the covid vaccine rollout is picking up in the region so the economic recovery could also gain momentum.
German inflation data provided little in the way of fresh impetus. German consumer prices rose 1.7% year on year in March, in line with expectations. This was up from 1.4% in February. On a monthly basis inflation rose 0.5%, down from the 0.7% growth seen in the previous month, but still in line with forecasts.
Today sees the release of the Eurozone’s trade balance and March inflation rates. If these data points beat forecasts the Euro could well end the week on the front foot.