- Pound (GBP) advances after booking slight losses last week
- No major data today, GDP Q1 final reading due later in the week
- Euro (EUR) edges lower ahead of a busy week of data
- Eurozone consumer confidence & German CPI inflation in focus
The Pound Euro (GBP/EUR) exchange rate is ticking higher at the start of the week after booking mild losses in the previous week. The pair settled -0.12% lower at €1.1625 on Friday after briefly spiking up to €1.1726 a two and a half month high earlier in the week. At 05:45 UTC, GBP/EUR trades +0.28% at €1.1650.
The Pound lost ground versus the Euro in the previous week after a more dovish than expected Bank of England monetary policy meeting. The central bank acknowledged that the UK economic recovery was on the right track, an assessment which was supported by strong PMI data earlier in the week.
However, the BoE made no indication as to when it could start tightening monetary policy which left investors disappointed.
This week is a quieter week for UK economic data. The final revision to UK first quarter GDP is due, however given that the second quarter is drawing to a close, this data is now rather dated. In the absence of much high impacting data, covid cases will remain in focus as the delta variant continues to spread quickly. Britain recorded 14,876 cases over the past 24 hours.
The Euro had a firm finish to the previous week, helped by strong IFO German consumer confidence and business climate data. As Germany vaccinations numbers rise, and pandemic restrictions are lifted sentiment continues to rise. The closely watched IFOP index rose to 101.8 in June, up from 99.2 in May.
The upbeat data came following strong PMI numbers earlier in the week.
Looking ahead, the Eurozone economic calendar is quiet. However, tomorrow things start to pick up with the release of Eurozone consumer confidence numbers and German inflation data for June.
Rising global inflation has been a key concern of the market as economies reopen. German CPI inflation is expected to show 2.3% in June YoY, down slightly from May’s 2.5% print. A weaker than forecast number could drag the Euro lower.