- Pound (GBP) rises on re-opening optimism
- UK unemployment data tomorrow
- Euro (EUR) supported by weaker US Dollar
- ECB in focus later in the week
The Pound Euro (GBP/EUR) exchange rate is ticking higher at the start of the new week. The pair gained 0.2% across the previous week, settling on Friday at €1.1537, up from the low of the week €1.1467. At 05:15 UTC, GBP/EUR trades +0.35% at €1.1580.
The Pound struggled to gain much traction versus the Euro and hit its worst level in two months last week despite the upbeat outlook for the UK.
Lingering Brexit concern, in addition to some political risk surrounding the Scottish elections early next month could have dampening demand for sterling.
Optimism surrounding the re-opening of the economy is driving gains today. Britain took further steps last week to ease lockdown restrictions, reopening all non-essential retail and outdoors hospitality.
There is no high impacting UK data due to be released today. However, there is plenty of data due to be released across the week. Tomorrow sees the release of UK unemployment data. This is followed by inflation data on Wednesday. Friday then sees the release of UK retail sales in addition to manufacturing and service sector PMI number. These will give investors a better idea as to how the UK economy is performing as it reopens.
The Euro has shown resilience versus the Pound, thanks mainly to a weaker US Dollar, the Euro’s largest rival. In addition, optimism surrounding the Eurozone covid vaccine programme is also lending support to the common currency. After a very slow start the rollout is accelerating offering hope that the rising covid numbers will soon be under control on the old continent.
There is no high impacting Eurozone data today. The key focus will be Thursday’s European Central Bank rate decision. Whilst the central bank is not expected to move on monetary policy, investors will be listening carefully to ECB President Christine Lagarde to see if she is adopting a slightly less dovish tone.