GBP/EUR Exchange Rate Rangebound as Sterling Investors Await Latest UK Consumer Confidence Data
The Pound Euro exchange rate held steady this morning following yesterday’s latest inflation data, which revealed that inflation had more than doubled in April. The pairing is currently trading around €1.15.
Hannah Audino, an economist at the consultancy PwC, commented on the data, saying the Bank of England was unlikely to rise interest rates in the near term.
Audino said:
‘If inflation does creep up beyond the 2% target, we expect the Bank of England to prioritise supporting the recovery over reducing inflation.’
Instead, Sterling traders have become more cautious, with the Indian variant of the coronavirus threatening to delay the Government’s roadmap for easing lockdown measures.
Health Secretary Matt Hancock said that the final decision on unlocking the nation would take place on 14th June, ahead of the scheduled 21st June further easing of restrictions.
Meanwhile, Pound traders will await today’s speech from the Bank of England’s (BoE) Deputy Governor for Financial Stability Sir Jon Cunliffe.
Any upbeat commentary about the outlook for the UK economy would bolster the Pound Euro exchange rate.
In UK economic data, this evening will see the release of the latest GfK consumer confidence report for May.
If this shows a marked improvement in consumer morale this month, then the GBP/EUR exchange rate would head higher.
Euro (EUR) Exchange Rate Steady as ECB Sees ‘Light at the End of the Tunnel’ for Eurozone Economy
The Euro (EUR) held steady this morning following the publication of the latest German producer price index (PPI) figure for April. The figure beat forecasts rising by 5.2%.
EUR traders have become more optimistic now that the Eurozone’s economy is showing more signs of bouncing back from its double-dip recession.
The Eurozone economy declined by 0.6 in the first quarter of this year, confirming a technical recession. GDP contracted in all of the larger countries that make up the bloc, except for France.
The Vice-President of the European Central Bank (ECB), Luis de Guindos, was more optimistic about the outlook for the Eurozone, however, saying that there was now a ‘light at the end of the tunnel’.
Europe’s vaccination programmes are, according to Guindos, ‘offering a route out of the pandemic’ and improving the outlook for the Eurozone’s economy in the months ahead.
As a result, we could see the EUR/GBP exchange rate head higher during today’s session if the outlook for the Eurozone economy continues to improve.
Pound Euro Outlook: Could Strong Eurozone PMI Data Drive Up the Single Currency on Friday?
Pound (GBP) traders will be awaiting the release of the latest UK retail sales figure for April.
Any further improvement in the outlook for the British economy would drive up the Pound Euro exchange rate.
However, UK markets will be awaiting further updates on the transmissibility and larger issue of the Indian variant of the coronavirus.
If the Government becomes more cautious about the Indian variant, suggesting a possible delay to easing lockdown measures, then the GBP/EUR exchange rate would slide.
Euro (EUR) investors will monitor tomorrow’s latest flash Eurozone PMI data for May. If these point to an upturn in the bloc’s economic growth, then the Pound Euro exchange rate would to sink.