The GBPEUR exchange rate is looking to build on recent gains above the 1.1300 level and is up slightly in early Tuesday trading. The market is awaiting data from the Eurozone ahead of Thursday’s Bank of England rate announcement.
The GBP to EUR is trading at 1.1330 as the pair awaits GDP data from the Eurozone and Italy.
Virus Spread Continues but UK Reaches 9 Million Vaccines
UK Health Secretary Matt Hancock has urged the country to “come down hard” on yet another virus mutation with over 100 cases of South African variant said to be in the country. Hancock suggested that the variant is more contagious than the original but offered no proof.
The latest development could hinder the progress that the UK has done recently with vaccines as it was also reported that the country has vaccinated over 9 million of the population with a first virus dose, while up to half of all people in their 70s have now had a first dose. On a percentage basis of its population the UK is still far ahead of other countries and this should play out further in the weeks ahead. The GBP to EUR exchange rate outlook has seen the pound strengthen since 2021 began and the latest figures will provide support for the pound as the market awaits economic data.
GDP and Inflation Ahead for Euro
Today sees further GDP data on the fourth quarter from the Italian and Eurozone economies for Q4. The Italian number may get some attention due to the recent political turmoil in the country. If the country is seen doing worse than expected, then traders could get concerned that the Italian leadership is distracted by politics when the economy and virus need their attention. The year-on-year number for Italy is expected to come in at -6.7%. The IMF has projected growth of around 3% for the country in 2021 but this could come up short due to various factors. Today will also see the same GDP numbers for the Eurozone with the year-on-year number expected to be -5.4%.
Tomorrow will see the release of the more important inflation figure for the Eurozone and traders will be looking for the economy to jump to 0.9% inflation versus 0.2% in the last two months. The European Central Bank has been watching Euro strength closely and a strong bounce would support the euro.
The GBP to EUR data watch will switch to sterling on Thursday with the Bank of England meeting to announce its latest interest rate and monetary policy decisions. The BoE is expected to stay on hold with both measures, but their latest quarterly forecast could shed some light on the path ahead.
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