GBP/EUR Exchange Rate Falls on Lack of UK Economic Data
The Pound Euro exchange rate dipped by -0.2% this morning despite growing confidence in the UK after easing lockdown measures bolstered the nation’s economy in the first quarter. The pairing is currently trading around €1.16.
Tej Parikh, chief economist at the Institute of Directors, commented that the UK is now on course to recover its economy this year. Parikh was confident that the ‘first quarter should market the low point for the economy in 2021’.
As a result, UK market mood has remained positive. But in the absence of any notable economic data today, the GBP/EUR exchange rate has dipped.
Prime Minister Boris Johnson also hinted on Wednesday that the working from home guidance could be dropped from as early as 21 June.
‘We’ll wait until we’re able to say that with more clarity a bit later on because we must be guided by what’s happening with the pandemic. It does depend on keeping the virus down.’
Instead, GBP investors will be awaiting today’s speeches from the Bank of England’s Deputy Governor for Financial Stability, Sir Jon Cunliffe, and Governor Andrew Bailey.
Any upbeat commentary about the outlook for Britian’s economy would drive up the Pound Euro exchange rate as confidence builds in the nation’s recovery from the Covid-19 pandemic.
Euro (EUR) Exchange Rate Edges Higher as Hopes Grow for Eurozone’s Economic Recovery
The Euro (EUR) rose against Sterling today despite the Eurozone’s industrial production data being weak in March. The latest gauge reported a meagre growth of 0.1% month-on-month, from -1.2% in February.
However, some analysts are confident that this is only a temporary setback, with the Eurozone’s economy set to recover in the coming months.
Carsten Brzeski, the Global Head of Macro, commented:
‘Supply chain distortions over the first months of the year could still lead to delays and a more erratic path of industry on its return to normal. However, past experience has shown that any of these supply chain distortions will only delay rather than derail the rebound of industrial production in the eurozone. March was only a short resting period in the starting blocks. In April, the race to recovery will be on.’
As a result, the Euro has benefited from renewed optimism in the Eurozone’s steady economic recovery, as the European Union (EU) continues to catch up with other nations with its Covid-19 vaccination programme.
GBP/EUR Exchange Rate Forecast: Could Growing Optimism for the UK Economy Boost the Pound?
Euro (EUR) investors will be awaiting tomorrow’s publication of the latest European Central Bank’s (ECB) latest accounts from the last monetary policy meeting.
Any indications that the ECB’s outlook for the Eurozone’s economy has improved would be EUR-positive.
The Pound Euro exchange rate could pickup before the end of the week, however, as the UK draws closer to further easing of lockdown measures on 17 May.