- Pound (GBP) rises as UK eases restrictions further
- A busy week for UK data with unemployment, CPI & retail sales
- Euro (EUR) supported by improving covid picture in the bloc
- No Eurozone data is due today, GDP Q1 reading is due tomorrow
The Pound Euro (GBP/EUR) exchange rate is edging higher at the start of the week. The pair rallied over 1% across the previous week closing on Friday at €1.1607, down from the weekly high of €1.1680. At 05:45 UTC, GBP/EUR trades +0.08% at €1.1613.
The Pound gained ground in the previous week following its strongest performance so far this year last Monday as the markets digested the results from local elections. The results favoured continued political stability. However, since then the Pound has struggled to gain any ground.
This week, however, is set to be a big week for UK data with UK unemployment numbers, inflation and retail sales all due over the coming days.
Today, the UK takes another step along its reopening path. Groups of 6 will now be allowed to meet indoors, restaurants, pubs and inside hospitality will be able to throw open their doors. This will help the UK economy to continue to rebound from its almost 10% contraction last year.
Whilst covid numbers remain very low with just 1926 new cases recorded and 4 deaths, concerns are growing over the more infectious Indian variant. Fears are rising that this new strain could prevent the UK from taking its next step along the reopening path on 21st June. Ministers will take a decision on 14th June.
The Euro found support from US Dollar weakness is the later part of the previous week. A very dovish Federal Reserve pulled the US Dollar off its weekly high. Today a rebound in the US Dollar is undermining the common currency.
In the Eurozone the accelerating vaccination drive is supporting the common currency. The third wave of covid in the region is coming under control.
The minutes from the latest European Central Bank meeting showed mixed sentiment within the central bank. Some policy makers wanted to continue with the asset purchase programme, whilst others are keen for the ECB to start tapering as early as June.
There is no high impacting data due today. Instead, investors will look ahead to Tuesday’s GDP reading & the PMI readings at the end of the week.