GBP/EUR: All eyes on Brexit negotiations as pound continues to slump against euro
  • Lower than average volumes due to Memorial Day holiday
  • Pound Euro lower for 2 consecutive days
  • UK markets closed on Monday
  • European equity closing lower

The Pound Euro (GBP/EUR) exchange rate is trading mildly lower for two consecutive days. The GBP to EUR pair was seen trading on Monday within a trading range of 1.1648 and 1.1608. At 07:20 UTC, GBP/EUR trades up +0.01% at 1.1633.

The observance of Memorial Day prompted market participants to retreat from markets due to the low trading volume.

Elsewhere, the European equity market traded lower on Monday with Spain IBEX leading the charge and closing lower -0.7%. At the same time, the German DAX closed -0.7% lower amid possible month-end flow.

The prospect of a BOE interest rate hike next year combined with ECB accommodative stance can provide further long-term support for GBP/EUR appreciation.

Key Economic Data Ahead

The day ahead is packed with key updates over the manufacturing sector in both the UK and Eurozone. The UK releases Markit Manufacturing PMI, which according to the market consensus Britain’s manufacturing sector is expected to stall at 66.1.

Manufacturing PMI in Euro Area and Germany is expected to be 62.8 points respectively 64.

At the same time, Euro area annual inflation as measure by the CPI is expected to increase in May by 0.3% to 1.9% from 1.6% previous reading. Economists also expect core CPI inflation to jump from 0.6% to 0.9% in May.