- Pound (GBP) remains under pressure despite BoE hawkish shift
- UK unemployment, CPI, retail sales all due this week
- Euro (EUR) gained last week on softer USD
- Eurozone CPI, GDP due this week
The Pound Euro (GBP/EUR) exchange rate is starting the week on the back foot, extending mild losses from the previous week. The pair lost 0.3% across the previous week snapping a three-week winning run. The pair settled on Friday at €1.1753 after hitting an 18-month high of €1.1836 earlier in the week. At 05:45 UTC, GBP/EUR trades -0.06% at €1.1760.
The Pound pushed higher across the start of the previous week underpinned by a more hawkish than expected BoE earlier in the month. Whilst keeping monetary policy on hold the UK central bank raised the inflation outlook to 4% by the end of the year whilst also sounding upbeat on the growth prospect.
UK GDP came in at 4.8% which was inline with forecasts. However, it was below the 5% expected by the Bank of England.
This week sees plenty in the way of UK economic data for investors to sink their teeth into. UK unemployment figures are due on Tuesday, followed by CPI inflation numbers on Wednesday and retail sales on Friday.
The Euro trended higher in the previous week, shrugging off weaker economic sentiment data and supported in part by a weaker US Dollar.
This week is expected to be a busy week for the Euro with the second quarter GDP release on Tuesday. Analysts are expecting a confirmation of the initial reading of 2%. This figure is signififcsntly softer than growth recorded in the UK economy. On a yearly basis GDP growth is expected to print at around 13.7%. However, given the deterioration is ZEW economic sentiment data and weakness in the industrial production figures in June, the Euro could struggle to find support.
Inflation for the bloc will also be in focus this week with CPI inflation due on Wednesday. Analysts expect CPI growth to slow to 0.7% which will ease any pressure of the ECB to move to start tapering support