EUR/GBP Exchange Rate Wavers as Cases Stabilise in the European Union
The Euro Pound (EUR/GBP) exchange rate is trading evenly today as Covid cases in Europe finally begin to stabilise. The single currency faces headwinds, however, off the back of yesterday’s lower-than-expected German Ifo Business Climate.
At the time of writing, the Euro (EUR) trades at £0.8550, virtually unchanged from opening levels.
Euro (EUR) Movement Limited as Coronavirus Cases Level Out
The Euro is trading evenly against the pound today as the European Union begins to see Covid cases coming under control. Cases fell to 58,119 overnight, as opposed to 68,324 yesterday.
In addition, the EU has met targets of vaccinating 70% of adults against Covid-19, according to Commission President Ursula von der Leyen:
‘The EU has kept its word and delivered… The catch-up process has been very successful — but we need to keep up the effort.’
Progress against the virus appears to have boosted EUR subsequent to yesterday’s disappointment over low-printing German Ifo figures. The German Ifo Business Climate dropped to 100.8 in July, from the previous month’s two-and-a-half-year high of 101.7.
According to analysts, supply bottlenecks were responsible for denting business optimism, alongside ongoing concerns regarding the coronavirus. The tourism and consumer sector in particular voiced concerns about a fourth Covid wave.
EUR trading sentiment remains mixed as China’s tech crackdown suppresses risk appetite, drawing support towards the Euro’s biggest trading partner, the US Dollar (USD).
Pound (GBP) Consolidates as Covid Cases Fall for Sixth Consecutive Day
Pound Sterling (GBP) receives tailwinds today as UK coronavirus cases fall for the sixth day in a row.
Markets are optimistic, as daily infections fall to 36,125 from 47,696 last Wednesday. However, experts have warned that the effects of ‘Freedom Day’ have yet to be reflected in virus statistics, as it will take two or three weeks to get a clear picture of what’s happening.
Meanwhile, distributive trades figures from the Confederation of British Industry (CBI) printed at 23 points; exceeding estimates of 21 while still falling short of last month’s 25 points. New order growth was the fastest it’s been since December 2010 and the pace of sales is expected to pick up again in August.
Potentially weighing upon the Pound, Boris Johnson has rejected a new set of proposals published yesterday by the European Commission. Europe’s latest conciliation attempt aimed to ease implementation of the Northern Ireland protocol.
A government spokesperson said that EU proposals represented ‘only a small subset of the many difficulties caused by the way the protocol is operating’.
Euro Pound (EUR/GBP) Exchange Rate Forecast: Data Releases to Drive Movement?
Looking ahead, the German rate of unemployment, due to print this Thursday, could boost the Euro if joblessness in Europe’s biggest player is shown to have fallen. Eurozone economic sentiment also has the potential to raise the Euro against its peers.
Eurozone Inflation and GDP figures print on Friday, with GDP growth widely expected to make up for last quarter’s contraction. If the release meets expectations, investors are likely to be encouraged at the prospect of economic recovery. Meanwhile, headline inflation is set to meet the European Central Bank (ECB)’s 2% target.
The Bank of England (BoE)’s consumer credit figures for June will also be released later this week. Predictions indicate that consumers feel more comfortable borrowing and spending for the second consecutive month; if the release prints as expected, the Pound could see some gains.