GBP/USD: Pound Drops Below $1.40 vs Dollar Amidst Slowing UK Economy
  • Pound (GBP) looks to Boris Johnson for Freedom Day news
  • Plenty of data this week including unemployment numbers, CPI & retail sales
  • Euro (EUR) came under pressure after dovish ECB meeting
  • Eurozone economic calendar is light this week

The Pound Euro (GBP/EUR) exchange rate is climbing higher for a third straight day on Monday. The pair gained 0.15% across the previous week settling on Friday at €1.1648 around 25 pips off the weekly high of €1.1673. At 05:45 UTC, GBP/EUR trades +0.07% at €1.1660.

The Pound rebounded towards the end of last week after Brexit tensions had dragged Sterling lower early on last week. Despite the ongoing deadlock surrounding the Northern Ireland protocol in the Brexit agreement sparking threats of a trade war the Pound mounted a solid recovery.

The Pound found support from the Bank of England’s Chief Economist Andy Haldane who suggested that the UK economy was recovery was in good sharp and the central bank may need to start reducing stimulus.

Today there is no economic data for investors to digest. All eyes will be on Boris Johnson to see whether the British Prime Minister will push back Freedom Day, the final easing of of lockdown restrictions. With covid cases rising as the delta variant spreads rapidly, there is a good chance that the date will be pushed back a few weeks, which could be the nail in the coffin for some businesses.

Looking ahead, this week sees plenty of economic data for Pound investors to sink their teeth into, including unemployment figures, inflation and retail sales.

The Euro came under pressure at the end of last week after the European Central Bank monetary policy meeting. The central bank kept rates on hold, as expected. However, ECB President Christine Lagarde said it was still too early to discuss tapering bond purchases, which dragged on demand for the single currency.

There is no high impacting Eurozone data due for release today. In fact, this week the Eurozone economic calendar is light with just inflation data towards the end of the week which could under pin the common currency. Analysts are expecting inflation to rise 0.3% month on month.