GBP/EUR: Gloomy Brexit News Weigh On Pound vs. Euro
  • Pound (GBP) ticks up July 19th Freedom Day looks likely
  • UK housing data due in quiet economic docket
  • Euro (EUR) resilient despite dovish ECB talk
  • Eurozone consumer confidence & German CPI inflation in focus

The Pound Euro (GBP/EUR) exchange rate is hold steady after mild gains in the previous session. The pair settled +0.12% higher on Monday at €1.1640 towards the low of the day.  At 05:45 UTC, GBP/EUR trades +0.02% at €1.1642.

The Pound managed to hold onto gains in the previous session after the new health secretary Sajid Javid said to Parliament that the UK will lift the remaining covid restrictions on 19th July, Freedom Day. The announcement came despite covid cases rising quickly owing to the more transmissible Delta variant.

Yet whilst covid number are rising, deaths remain low suggesting that the link between covid and deaths is weakening thanks to the vaccine.

There is no high impacting UK data due to be released today. Investors could look towards housing data and mortgage approvals which could shed some light onto the health o the economy. Although the current housing boom is more due to the government’s stamp duty holiday, which comes to and end this month.

Looking ahead, this week is a quiet week for UK economic data with manufacturing PMIs and GDP final estimate in focus later in the week.

The Euro showed resilience despite more dovish commentary from the European Central Bank. The ECB’s Holzmann said that there is no room to increase interest rates given the weak inflation. He added that the PEPP bond buying programme will end when the covid emergency is over, something which is unlikely to happen soon.

Attention will now turn to consumer confidence data which is expected to show that morale continued rebounding in June. Analysts expect economic sentiment to rise to 116.5 in June 114.5.

German inflation will also be in focus, particularly as global inflation concerns have lingered in recent weeks. German CPI inflation is expected to ease slightly to 2.3% in June, down from 2.5% year on year. On a monthly basis inflation is expected to rise 0.4%, down from 0.5% in May. A stronger than forecast print could boost the Euro.