- Pound (GBP) trades mixed versus majors
- Sterling shrugged off Dominic Cummings testimony
- Euro (EUR) came under pressure on US Dollar strength
- German GFK consumer sentiment to show an improvement
The Pound Euro (GBP/EUR) exchange rate is holding steady on Thursday after booking solid gains in the previous session. The pair settled +0.25% higher on Wednesday at €1.1578 towards the high of the day. At 05:45 UTC, GBP/EUR trades 1 pip lower at €1.1577.
The Pound traded higher versus the Euro but lower versus the US Dollar in the previous session. In the absence of any high impacting UK economic data, investors were left digesting a testimony by Dominic Cummings in Parliament. Cummings, a former close aid to Prime Minister Boris Johnson heavily criticised the British government and its handling of the covid crisis. The Pound shrugged off the appearance.
Covid cases are on the rise with 3180 new cases recorded and 9 new deaths registered on Wednesday. 38.8 million people have had their first dose of the covid vaccine.
There is no high impacting UK data to be released today. Investors will continue monitoring the covid situation. A speech by Bank of England policymaker Vlieghe could also provide fresh impetus for the Pound.
The Euro came under pressure in the previous session as the greenback strengthened, rebounding off 5-month lows. The Euro trades inversely to the US Dollar and had been supported by the falling greenback at the start of the week.
As with the UK, the Eurozone economic calendar was very light with no high impacting releases.
Today investors will be focusing on the release of German GFK consumer confidence. The GFK release for May unexpectedly declined to -8.8 against -3.5 forecast as the tightening of covid restrictions weighed on consumer morale. The release for June is expected to show an improvement ticking higher to -5.2.
The accelerating vaccine rollout, declining covid cases and gradual easing of pandemic restrictions next month are expected to see sentiment rise from May’s lows.
In addition to data, investors will be looking to a speech by European Central Bank policy maker De Guindos and the German Central Bank president Weidmann for further clues on the health of the recovery.