- Pound (GBP) supported by reopening optimism
- CBI retail sales report shows firm rebound in April to 2.5 year high
- Euro (EUR) shrugged off German GDP upgrade
- German GFK consumer confidence up next
The Pound Euro (GBP/EUR) exchange rate is holding steady on Wednesday. The pair settled flat on Tuesday at €1.1504 in a fairly quiet session where the pair traded a tight range. At 05:15 UTC, GBP/EUR trades a few pips lower at €1.1498.
The Pound is well supported by a rapid vaccine rollout and the reopening of the UK economy. Somme 33.8 million people have now had their first vaccine dose. The number of covid cases has fallen a further 17% across the week.
According to the British Retail Consortium, British retailers reported the sharpest rise in rise since 2018 this month as non-essential shops through open their doors after months of lockdown. The upbeat news added to signs that the UK economy was rebounding firmly.
The CBI monthly retail report jumped from -45 in March to +20 in April, its highest level in 2.5 years.
Economist forecast that the UK economy will rebound by around 6% this year following last year’s record 10% contraction.
The Euro shrugged off news that the German government raised its growth forecasts to 3.5%, up from a previous estimate of 3%. The government of the Eurozone’s largest economy believes that consumer spending will help boost the recovery once covid restrictions are lifted.
Currently Germany is struggling to contain a third wave of covid which has seen the country go back into lockdown.
Even so, the Economy Minister Peter Altmaier said that he believes that the German economy will reach its pre-pandemic level in 2022. The projection was encouraging, despite the seriousness of the ongoing covid situation.
Looking ahead, GFK consumer confidence data will be in focus. Expectations are for consumer morale to have picked up in April to -3.5, up from -6.2 in March. A strong reading could boost the common currency.