- Pound (GBP) under pressure after dovish comments from BoE’s Andrew Bailey
- There is no high impacting data due to be released
- Euro (EUR) supported by improving economic outlook
- ECB to release minutes from latest meeting
The Pound Euro (GBP/EUR) exchange rate is edging lower for a fourth straight session. The pair settled -0.07% lower on Thursday at €1.1629, up from a low of €1.16 reached earlier in the session. At 05:45 UTC, GBP/EUR trades +0.08% at €1.1621. The pair is still on track to gain over 1% across the week.
The Pound traded lower after Bank of England Governor Andrew Bailey warned that he didn’t think that the situation with low interest rates would change markedly. His comments suggest that the UK central bank is in no rush to tighten monetary policy despite the fact that the UK economy is on the path to recovery.
Andrew Bailey’s comments come after the UK GDP contracted -1.5% quarter on quarter in the first three months of the year. However, the data from the Office of National Statistics also revealed that the British economy expanded 2.1% month on month in March, well above expectations, firmly up from 0.4% in February.
Once again there is no economic data due for release today. Investors are likely to continue monitoring the Brexit jitters surrounding Northern Ireland. However, investors could also start to look towards Monday 17th May when lockdown measures are eased further.
The Euro strengthened versus the Pound but slipped versus the US Dollar on Thursday after strong US inflation data and jobless claims.
The Euro is finding strength as the macro economic picture continues to improve. With the vaccine rollout now in full swing in the bloc and covid numbers easing, the outlook is brighter.
Recent economic data from the bloc has broadly come in inline with forecasts or ahead of expectations.
The Euro will look ahead to the release of the minutes from the latest European Central Bank meeting. Should the minutes give any clues that policy makers outlook for the Eurozone economy has improved, then the Euro could extend gains.