- Pound (GBP) rises despite Brexit woes
- Truck driver shortage hits supply chains
- Euro (EUR) slips after weaker IFO business sentiment data
- ECB minutes in focus
The Pound Euro (GBP/EUR) exchange rate is advancing on Thursday, adding to gains in the previous session. The pair settled 0.1% higher at €1.1686 just off the daily high if €1.1697. At 05:45 UTC, GBP/EUR trades +0.06% at €1.1693.
The Euro traded under pressure on Tuesday on the back of weaker than forecast data and dovish comments from the European Central Bank.
First up, German IFO data revealed that business sentiment deteriorated by more than expected this month. The headline figure dropped to 99.4, down from 100.8, and below forecasts of 100.4.
The data suggests that the German economic recovery following the pandemic could be starting to lose momentum. The data came following German manufacturing PMI data on Monday which revealed that the sector expanded at a slower rate than forecast.
The softer data this week could fuel concerns that the German economic bounce is fading which could limit to appeal of the Euro.
Adding to the common currency’s woes the ECB’s chief economist Philip Lane said that he though it was still too early for the ECB to start discussing the end of its bond purchase programme the Pandemic Emergency Purchase Programme and the banks next policy meeting in September.
Attention today will be firmly on the ECB with the release of the minutes to the latest meeting.
The Pound gained ground in the previous session but wasn’t able to fully capitalize on the weaker Euro given rising concerns over UK supply chain issues and labour market concerns.
A shortage of truck drivers is contributing to the significant supply chain problems being experienced in UK retailers. The government has refused to grant visas for EU truck drivers to fill the labour market shortage that Brexit left behind.
There is no high impacting UK data due to be released today. All eyes will be on the Jackson Hole Symposium which kicks off today.