The pound to euro exchange rate was flat in early Tuesday trading after the pair erased an early week dip. Sterling is threatening to break above a key support level as the market awaits inflation data and a rate decision from the European Central Bank.
GBPEUR was trading at 1.1245 in early Tuesday trading and the 1.1280 price level would be the target for further gains to develop.
Economic Data Ahead for the GBPEUR
The pound to euro pair will be see economic data released in the next two days, with German inflation up first. The German number has been stuck in deflationary territory at -0.3% and analysts are expecting the same number. The country is performing well in manufacturing, but prices and retail sales are lagging with the ongoing lockdowns in the country.
The inflation numbers will be followed by the German Economic ZEW Sentiment Index. The reading is based on a survey of business owners to get their take on the outlook. Traders are expecting to see a reading of 60, versus last month’s 55. The market is not paying the same heed to sentiment numbers in light of the current conditions and the inflation number will be the most important today.
Tomorrow will be a key day for the GBP to EUR pair as the UK and Eurozone both release the latest inflation numbers for December. Both nations were plunged back into government-imposed lockdowns and this should dampen prices for the month.
Thursday brings an ECB rate meeting and the inflation number will be interesting to watch as it may give traders an idea of whether the ECB will introduce further stimulus or rate cuts to fight deflation. The Bank of England has already backed off from an imminent move, so that could drive further pound strength.
UK Still Battling Virus But Hope is on the Horizon
Britain is said to have the highest daily coronavirus fatality rate in the world, according to data from Oxford University.
The figures showed an average of over 900 daily over the last week, which is the equivalent of more than 16 people in every million. The situation is still showing signs of hope for the country as Public Health England (PHE) has confirmed that over 4 million have now been vaccinated in the country.
The government has been leading an aggressive rollout plan to vaccinate the vulnerable age groups in the population. Health Secretary Matt Hancock offered some hope that the virus was coming under control but was cautious about any quick recovery this year. Hancock confirmed that 10 new mass vaccination centres had opened in the country of Monday, as more than half of people over 80 and half of elderly care home residents given the vaccine.
The government has vaccinated almost 30% of its planned 15 million goal by mid-February and this has boosted the pound to euro outlook. Europe has been slower off the mark with its own vaccinations and last week’s delays on the Pfizer jab slowed this further.
Get in touch to discuss these factors, and their potential impact on your currency exchange involving pounds to euros, using the form below.