- Pound (GBP) moves higher finding some support from rising footfall numbers
- UK Q2 GDP data due this week
- Euro (EUR) pressurised after disappointing Eurozone sentiment data
- Eurozone & German ZEW sentiment data due
The Pound Euro (GBP/EUR) exchange rate is ticking a few pips higher after a flat finish on Monday. The pair settled on Monday at €1.1791 after ticking as high as €1.1818 a fresh 11 month high. At 05:45 UTC, GBP/EUR trades +0.04% at €1.1795.
The Pound held steady at the start of the week amid rising covid cases and a quiet UK economic calendar. Covid cases rose by 5% to 31,800 over the past 24 hours.
Whilst high impacting macro-economic data was in short supply, data revealed that shopper numbers were up 1.4% in the week to August 7 compared to the previous week, lifted by the school summer holidays period. Whilst this is certainly encouraging, the same data revealed hat footfall was some 20.1% lower compared to the same week in 2019, suggesting that the pandemic disruption was still in place and or that shoppers had changed their habits long term.
Looking ahead today there is no high impacting UK data. Instead, investors will be gearing up towards the UK Q2 GDP due to be released on Thursday. Expectations are for the UK economy to have grown 4.8% quarter on quarter up from a -1.6% contraction in Q1.
The Euro continues to trade under pressure, extending losses from the previous week. Eurozone investor confidence weakened in August owing to a sharp decline in the expectations sub-index. The Sentix survey revealed that investor morale index dropped sharply to 22.2 in August in August, down from 29.8 in July. This marked the third consecutive month of declines in morale which comes as the economy is booming but growth is slowing.
Today the ZEW sentiment data for both Germany and the Eurozone will be in focus. Analysts are expecting the current situation sub index in Germany to jump higher to 30 from 21.9. However, economic sentiment in August is expected to fall to 57 from 63.3 as growth slows and concerns over the delta variant linger.
