- Pound (GBP) rises after after upbeat BoE comments
- UK GDP expected to grow at a faster clip
- Euro (EUR) slipped after weak German IFO business sentiment numbers
- Eurozone outlook broadly improving
The Pound Euro (GBP/EUR) exchange rate is edging higher for a second consecutive day. The pair settled +0.3% on Monday at €1.1503, after rallying to a high of €1.1517. At 05:15 UTC, GBP/EUR trades +0.03% at €1.1506.
The Pound rose in the previous session supported by reopening optimism. A bullish report by the Bank of England’s deputy governor Bill Broadbent underpinned the rally. Broadbent believes that the UK will see “very rapid growth over the coming quarters fueled by a further increase in consumer spending.
According to the latest EY ITEM Club report, the UK economy is expected to expand by 6.8% in 2021. This would mark the fastest rate of growth since the second world war and up significantly from the previous forecast of 5%.
The UK vaccination programme continues at a rapid pace keeping the UK on track with its reopening plan.
There is no high impacting UK data today. However, there are plenty of UK stocks reporting their results which could impact the mood in the market.
The Euro came under pressure on Monday following disappointing German business sentiment. Business morale in the Eurozone’s largest economy only improved marginally in April, instead held back by a third wave of covid.
The IFO business climate index rose to 96.8 in April up from 96.6 in March. However, it printed below analysts expectations of 97.8.
The data comers following from Friday’s upbeat PMI figures which highlighted a more optimistic picture for economic outlook in the bloc. The Eurozone composite PMI, which is often considered a good gauge of economic health, reached a 9-month high in April, mainly supported by record strength in the manufacturing sector.
Today the economic calendar is very light with just Italian consumer confidence. This means that sentiment will likely drive the value of the Euro.
Broadly speaking the outlook is improving for the bloc as the covid vaccine programme accelerates.