The GBPEUR exchange rate was trading near the previous day’s close as traders ponder the latest data releases. The pound has seen a better-than-expected jobs number, with a lower inflation number. The UK and Europe have both seen good results from PMIs.
GBP v EUR is trading at 1.1580 as the pair pulls back from the recent sterling gains.
German Consumer Confidence Lifts, Merkel Caves
This morning saw an uptick in German consumer confidence with a reading of -6.2 versus expectations of -11.2. The numbers imply that consumers are not very confident with the continual lockdowns but they are may more hopeful than analysts assume.
The bigger news for Germany was a u-turn by Chancellor Angela Merkel over the Easter holiday shutdown. In a tense video call with officials that began on Monday afternoon, Ms Merkel apparently run out of ideas and in desperation, turned to chief of staff Helge Braun to ask: “Do you have any other idea?” Braun, who is a qualified doctor, suggested a five-day hard lockdown over the Easter weekend.
The plan has now been cancelled due to a backlash and it is one of the first instances of western leaders crumbling over their lockdown strategy.
The GBPEUR is waiting for a new catalyst to decide if the 1.17 level or the 1.15 support will be the next path and the ability to get out of lockdowns will be the big driver of exchange rates. At present, the UK is leading the UK on vaccination rates.
Boris Warns of Pub Bans for Non-Vaccinated
After flip-flopping on the covid health passport scheme, Boris Johnson is now talking about banning people from pubs if they are not vaccinated.
In another example of moving the goalposts, the Prime Minister is finally heading to a world where people can congregate in bars, but now it will require a vaccine app.
“People, human beings, instinctively recognise when something is dangerous and nasty to them, and they can see that COVID is collectively a threat and they want us as their government, and me as the Prime Minister to take all the actions I can to protect them.”
The pound to euro exchange is like a deer stuck in the headlights at the moment as nobody really knows the path forward. The Johnson roadmap is said to lead to an April and May reopening but the politicians are talking of apps and regulations to enjoy the freedoms that were promised.
The GBPEUR rate trades at 1.1590 after surrendering gains near the 1.17 level. The 1.15 level is the key support and the next few economic releases will be from Germany with the IFO business survey and employment.
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