- Pound (GBP) eases after strong start to the week
- Doubts rise over 19th July Freedom Day
- Euro (EUR) fell after German industrial output fell unexpectedly
- German trade balance & ECB strategy meeting in focus
The Pound Euro (GBP/EUR) exchange rate is heading lower on Thursday after a solid start to the week. The pair gained 0.28% on Wednesday settling at €1.1702 at the high of the day. At 05:45 UTC, GBP/EUR trades -0.14% at €1.1686.
The Pound pushed higher in the previous session as investors continued to assess the chances of the UK easing covid rules further on July 19th. Whilst optimism dove the Pound higher on Wednesday, concerns are dragging on the Pound today. The number of new daily covid cases pushed pass 30,000 for the first time since January.
There was no high impacting UK data yesterday, however housing price figures revealed that the housing price boom in the UK cooled in June. House prices slipped lower last month for the first time since January as the end of the government’s tax break neared. According to Halifax house prices declined -0.5% compared to May.
UK data continues to be in short supply today, with little on the economic docket to grab Pound investors attention. Investors will need to wait until Friday for the release of UK GDP, the first reading of the second quarter.
The Euro came under pressure in the previous session after German industrial output fell in May by more than forecast. Industrial output decreased by 0.3% month on month in May after declining -0.3% in April. Analysts had been expecting an increase of 0.5%.
The data comes after German factory orders unexpectedly decline in May and adds to evidence that supply chain bottlenecks are hitting the automotive sector and slowing the recovery in Europe’s largest economy. German investor sentiment also experienced a bigger than expected drop in July, although morale remained a historically high levels.
Looking ahead, Germany will remain under the spotlight with trade balance data. Furthermore, the ECB President Christine Lagarde is expected to report on the special meeting being held this week which aims to wrap up the strategy review.