• Pound (GBP) supported by reopening optimism
  • UK unemployment data in focus
  • Euro (EUR) traded mixed on Monday in quiet session
  • Eurozone GDP to confirm -0.6% QoQ contraction

The Pound Euro (GBP/EUR) exchange rate is extending gains for a second straight session on Tuesday. The pair settled +0.19% on Monday at €1.1628, towards the high of the day. At 05:45 UTC, GBP/EUR trades +0.1% at €1.1650.

The Pound gained ground in the previous session as England took its next steps along the re-opening path. More lockdown restrictions were eased, and large parts of the UK economy are back in business as inside hospitality is reopened, in addition to cinemas and indoor gym classes.

Comments by the UK Health Minister Matt Hancock that the Indian variant of covid was not affecting older vaccinated people also underpinned the Pound. Concerns had been growing that the new covid variant could delay the final reopening stage in June.

Today sees attention return to the UK economic calendar with the release of jobs data. The Unemployment rate unexpectedly fell in the three months to March to 4.9%, down from 5%. Analysts are expecting the unemployment rate to remain steady at this level as the Government’s furlough scheme continues to support the pandemic impact on the UK labour market.

The Bank of England recently upwardly revised its unemployment outlook. The central bank now expects unemployment to peak at 5.5%, down from 7.5%.

Looking ahead, UK inflation data is due tomorrow and retail sales is set to be released on Friday.

The Euro traded mixed versus its major peers in a relatively quiet session. The Eurozone economic calendar was quiet and risk sentiment was soft keeping the Euro flat.

Today all eyes will be on the second reading of the Q1 GDP for the region. Analysts are expecting a confirmation of the preliminary reading which revealed a 0.6% quarter on quarter contraction in the first three months of the year. On an annual basis a -1.8% contraction is expected.

The reading is expected to show a contraction as the region was lockdown due to covid restrictions. The hope is that the first three months of the year were the worst. A stronger than forecast print could lift the value of the Euro.