- Pound (GBP) supported by strong PMI & retail sales data in previous week
- Covid cases rise 10.5% in a week
- Euro (EUR) trades found strength from weaker US Dollar last week
- German GDP data due tomorrow
The Pound Euro (GBP/EUR) exchange rate is holding steady at the start of the week. The pair closed out the previous week at €1.1612, roughly the same level that it had started the week and approximately mid way through the weekly traded range. At 05:45 UTC, GBP/EUR trades +0.03% at €1.1615.
After a busy week for UK data last week, this week is much quieter. Across the previous week a barrage of numbers were released providing further insight into the health of the UK economy just as lockdown restrictions were eased further.
UK unemployment unexpectedly fell in the three months to March. Inflation as measured by consumer prices jumped to 1.8%. Retail sales also surged higher to 9.2% month on month in April, as shops re-opened their doors. Finally, PMI data revealed that the UK service sector activity has fired back into life as restrictions eased.
This week the economic calendar is much lighter with just UK public sector net borrowing due on Tuesday. Consequently, other factors such as Brexit jitters over Northern Ireland and covid developments could take centre stage.
The number of UK covid cases are on the rise, up 10.5% in the past week as the Indian variant spreads quickly. However, the AstraZeneca and Pfizer vaccines appear to be effective against the new variant.
The Euro was supported in the previous week despite a contraction in Q1 GDP in the region. Weakness in the US Dollar offered plenty of support to the common currency as well.
PMI data on Friday was also cheered. The bloc’s service sector PMI rose by more than forecast to 55.1, well ahead of the 52.6 forecast as parts of the Eurozone eased lockdown restrictions.
Euro traders will be watch the release of final German GDP data in addition to German IFO business climate data. The GDP data is expected to confirm at -1.7% contraction in the first three months of the year.