GBPEUR Looks to Economic Reopening for Further Gains

GBP EUR Risks Surrendering the 1.1600 Level 

The GBPEUR exchange rate saw another strong week as the UK moved to the next stage of its reopening plan, whilst France went into another lockdown and European data was flat. Economic data will see the release of unemployment rates for Italy, Spain, and the Eurozone.

The GBP to EUR rate starts the week 20 pips below the recent highs at 1.18 as the pair seeks a push towards the 2020 highs at 1.20.

Travel News Could Dominate

UK Prime Minister Boris Johnson gave the green light for an April 12th opening of gyms, hairdressers etc. in line with the original plan.

Johnson is due to give a travel update today but is dragging his feet again after comments yesterday saw the PM saying that he was “hopeful” for the May 12th travel window. Johnson added:

“But I do not wish to give hostages to fortune, or to underestimate the difficulties we are seeing in some of the destination countries that people might want to go to. We don’t want to see the virus reimported to this country”.

His comments fail to accept that over half of the country are now vaccinated for the virus, with the vulnerable age groups receiving both vaccinations. A travel ‘task force’ will set out what he called a “reasonable” plan on travel abroad this week. A traffic light system is expected for countries depending on their own virus situation, but the PM hinted that there is no imminent change, saying that he would give the airline industry “as much notice” as possible on the resumption of travel.

For the pound versus the euro it is another missed opportunity to make an early start on economic repair in a key sector. The UK government is looking at a plan to use vaccination proofs for entry to large events, with the Prime Minister expected to provide further details on Monday.

Economic Calendar Light for the Week

The economic calendar is light for the week ahead with the highlight being the release of European Central Bank (ECB) meeting minutes on Thursday. After the recent increase in bond buying by the bank, the inflation fears receded and European economic data has been stable.

Tuesday will see the release of employment rates for Italy, Spain, and the Eurozone but these are not expected to move the sterling to euro rate that much.

France and Italy attempted to ramp up their vaccination rates over the weekend, this could boost the euro down the line once the numbers filter through, although Easter holidays affected the rollout in the key countries. The French military was set to open seven vaccination centres from today, while Spain increased its rollout with the arrival of 2 million doses over the last week, which is its biggest delivery so far.

GBPEUR is trading at 1.1780 in early trading and the Prime Minister’s comments will likely set the tone for the day. Get in touch using the form below to discuss these factors in further detail ahead of your currency exchange.