The GBPEUR is running out of steam near the yearly highs with a 0.27% move lower on Tuesday. The pair has failed to see a catalyst for further pound strength and some profit-taking could be emerging near this level. The morning will see inflation data from Italy and France, alongside economic sentiment data from Germany and the Eurozone.
The GBP to EUR is trading at 1.1620 and we also have the latest Bank of England rate announcement on Thursday.
Traders Will be Watching Inflation Over Economy
Today sees inflation data from France and Italy, which will have traders’ attention more than the economic sentiment figures that are due out. The ZEW economic index for Germany and Europe will highlight business owners’ thoughts on the next 6 months for the economy, but this is largely known with recent events and data.
Traders will be looking to the inflation numbers in light of the recent bond shock, but the ECB have already telegraphed further bond buying so the figures may not be able to cause too much concern. The GBPEUR was unable to get above the 1.17 level after two attempts this year and a test of 1.16 looks possible. The Euro could regain some ground if the UK doesn’t capitalize on its reopening plans.
Inflation in France is predicted to fall by 0.2% in the French economy, while forecasts are for the opposite move in Italy. These numbers will be followed by the ZEW indices with Germany expected to see a 74 reading, which would be an improvement on last month and underline positivity among business owners.
European Vaccine Program Struggles on Astra Halt
Europe’s slow rollout of vaccines has plunged into further problems as the bloc’s largest economies suspended use of the AstraZeneca vaccine. The shot has been at the centre of recent controversy over blood clots and Germany, France, and Italy took a co-ordinated response to the problem.
The European Union’s vaccine program now hinges on research by the European Medicines Agency, which is expected to make a decision on Thursday. This will be the same day as the Bank of England announcement and good determine the currency outlook for the pound to euro.
German Health Minister Jens Spahn said in an interview that, “This decision is professional, not political,” yet the Anglo-Swedish drug maker upset the European Union earlier in the year by halting production.
The EU has ordered around 400 million vaccine shots for the second quarter, which are largely from Pfizer, with another 600 million for the third quarter. The bloc plans to immunize 70% of adults by the end of September. The UK is expecting to have its economy fully open at the end of the second quarter.
If you have an upcoming currency exchange and would like to know more about how these factors will impact exchange rates in the short term, you can get in tough using the form below.