GBP/EUR Exchange Rate Rangebound as UK Covid-19 Cases Steadily Rise
The Pound Euro exchange rate held steady this morning following news that the property website Zoopla is projecting that UK house prices could rise by 46% against last year. The pairing is currently fluctuating around €1.15.
GBP is rangebound against the single currency as confidence continues to grow in the UK economy, especially now that further easing of lockdown measures are still on schedule for June.
Grainne Gilmore, head of research at Zoopla, commented on the company’s projections for the year ahead:
‘The easing of lockdowns will continue to cause a natural fall in demand as people are able to see family and enjoy amenities that have been shut for more than a year, but new buyer demand will still emerge throughout the second half of the year as office-based workplaces confirm if they will be pursuing more flexible working practices.’
In the absence of any notable UK economic data today, GBP investors are becoming cautious as daily cases of Covid-19 continue to rise throughout the UK.
However, those in hospital continue to fall, with daily deaths also remaining relatively low compared to earlier this year.
Euro (EUR) Exchange Rate Steady as French Business Confidence Improves in May
The Euro (EUR) failed to rise against Sterling today despite better-than-expected French business climate in manufacturing data for May. The figure rose above forecasts from 104 to 107.
Insee, the French National Institute of Statistics and Economic Studies, said that the surge in the services sector and easing of lockdown restrictions – allowing the gradual reopening of shops, bars and restaurants – had indicated a ‘strong advance in economic activity’ in recent weeks.
The latest French consumer confidence gauge also rose to 97 this month. This has further buoyed confidence in the outlook for the Eurozone economy.
The European Central Bank’s (ECB) policymaker, Yannis Stournaras, however warned that the Eurozone economy is ‘still fragile’, adding that ‘there is no risk of high inflation era’.
As a result, we could see the EUR/GBP exchange rate begin to dip today, as Euro investors are likely to remain cautious as the outlook for the Eurozone’s economy still remains largely uncertain.
GBP/EUR Exchange Rate Forecast: Could a Bullish Bank of England Drive Up Sterling?
Euro (EUR) investors will await tomorrow’s release of the German GfK consumer confidence survey for June.
Any improvement in the outlook for the Eurozone’s largest economy would be EUR-positive.
Tomorrow will also see a speech from Dr Jens Weidmann, the president of the Deutsche Bundesbank.
If Weidmann is upbeat about the outlook for the German economy, then the EUR/GBP exchange rate could head higher.
The Pound Euro exchange rate could rise, however, if tomorrow’s speech from the Bank of England’s (BoE) Dr Gertjan Vlieghe, is bullish about the UK’s economic recovery.