Euro Pound Exchange Rate Climbs as Eurozone PMIs Beat Forecasts
Despite some forecast-beating UK data supporting Sterling (GBP), the Euro Pound (EUR/GBP) exchange rate is climbing again today. The Euro (EUR) is benefitting from the latest Eurozone PMIs, which point towards an optimistic outlook for Eurozone recovery.
Since opening this week at the level of 0.8658, EUR/GBP has spent most of the week trending with a downside bias.
However, amid the European Central Bank (ECB) policy decision yesterday, investors bought the Euro and pulled EUR/GBP to weekly highs.
At the time of writing, EUR/GBP is trending near those highs in the region of 0.8689. This isn’t too far from last week’s monthly best level of 0.8717.
While next week’s UK economic calendar will be a little quieter, key Eurozone data including growth rate stats could influence the Euro to Pound exchange rate.
Euro (EUR) Exchange Rates Bolstered as Eurozone Recovery Picks Up
Investors are gradually having a more optimistic outlook for the Eurozone and the Euro, following months of gloom earlier in the year.
The Eurozone coronavirus vaccination rollout is expected to accelerate considerably this quarter. Analysts also remain confident that the European Central Bank (ECB) could be pressured to react to stronger Eurozone data sometime in the summer.
Today’s Eurozone PMI projections for April have been the latest sign that things in the Eurozone are brightening. The data beat forecasts in most major prints.
All this is gradually giving the Euro more and more support, helping it to hold its ground and start to advance more.
Pound (GBP) Exchange Rates Struggles despite Strong UK Data
The past week has seen slightly weaker demand for the Pound. As investors digested fairly mixed or unsurprising UK data, it was not enough to lead to higher demand for the British currency.
Today’s UK retail sales and PMI projections stats did beat forecasts comfortably however, bolstering Sterling demand slightly at the end of the week.
Reacting to today’s strong UK data, Dean Turner at UBS Global Wealth Management said:
‘With all sectors showing an improvement relative to March, we believe this points to further strength in the economy in the months ahead.’
However, for now at least the Pound is struggling to hold its ground against the Euro which continues to gain steam.
Euro Pound (EUR/GBP) Exchange Rate Awaits Eurozone Data, but Sterling Could Remain Strong
Next week will see the publication of many key Eurozone ecostats, which could continue to add to the gradually rising momentum behind the Euro’s strength.
Earlier next week, German confidence data will be published and could cause some movement. More influential data due in the second half of the week includes German and Eurozone growth rate, inflation and unemployment figures.
While demand for the Euro could continue to pick up in the coming weeks if data continues to impress though, some analysts also predict more strength for the Pound.
According to UBS Wealth Management’s Dean Turner, the bullishness around Sterling could rise further if the Bank of England (BoE) is pressured into a more hawkish stance any time soon. He said:
‘We expect that the Bank will show modest uplift in their growth outlook, which is likely to keep them in a hawkish mood. This, along with the strong recovery, should continue to support Sterling, which we expect to trade higher against the Euro and US dollar as the year progresses.’
With plenty of data due next week, there is plenty for Euro Pound (EUR/GBP) exchange rate investors to react to towards the end of April.