- Pound (GBP) supported by reopening optimism, Boris sleaze not impacting yet
- Scottish elections & BoE in focus next week
- Euro (EUR) falls on USD strength
- German GDP data & Eurozone inflation due
The Pound Euro (GBP/EUR) exchange rate has barely moved in the past three sessions. The pair settled flat again on Thursday just 6 pips higher at €1.1506 in another very quiet session. At 05:15 UTC, GBP/EUR trades flat at €1.1506.
The Pound remains supported by emerging evidence that the easing of lockdown restrictions earlier this month is lifting consumption. This, combined with the ongoing rollout of the covid vaccine programme are supportive for economic growth.
There is plenty of sleazy news swirling surround Tory Prime Minister Boris Johnson, for now that hasn’t been impacting the Pound. However, if the situation worsens that Pound could take a tumble.
There is no high impacting UK economic data due to be released today, so the Pound is likely to be driven by sentiment. Looking ahead to next week politics will be in focus in addition to the Bank of England monetary policy announcement.
Elections in Scotland will be closely watched because a win by the nationalist party could raise the chances of the Scottish nationalist party calling and winning a vote of independence from the United Kingdom.
The Euro came under pressure in the previous session owing to the stronger US Dollar and despite upbeat Eurozone economic data. Eurozone economic sentiment surged in April as the vaccine programme continued to ramp up. The European Commission’s sentiment indicator surged to 110.3, up from 100.9 in April.
German inflation was also notable, jumping 0.7% month on month, ahead of the 0.5% expected. On an annual basis inflation rose 2% up from 1.7%.
The Eurozone economic calendar will be in focus again today with Eurozone inflation and German GDP both set to be released.
The German economy is expected to have contracted in the first three months of this year after eking out a very small expansion at the end of last year. Analysts have penciled in a -1.5% contraction quarter on quarter as the country battled with a resurgence of covid.
