GBPEUR Aims for 1.1700 Ahead of German and UK Data

GBPEUR Sinks on UK ‘Freedom Day’ Shambles

The GBPEUR exchange rate is trading at 1.1640 as the market awaits the release of economic data for German and the UK. The first release is German inflation numbers which will be interesting to see how prices are rising in Europe’s largest economy. That will be followed by employment data from the UK, which will show investors how the hiring process has improved with the reopening of the economy.

The GBP to EUR is aiming for the 1.17 level with the yearly highs at 1.18. Support would come in around the 1.1470 level.

Germany’s turn to gauge price pressures

The latest inflation numbers are due out for the German economy and traders are expecting the number to be 2.5% with a jump from 2% last month.

Inflation was back on traders’ radars after the US saw the highest inflation numbers since 2008 and it brings the risk that import and export prices could rise, while consumers would also feel the pinch and threaten the fragile global recovery.

If the numbers are higher it will also put pressure on the ECB to take action over bond yields. Higher prices than expected would see higher bond yields and threaten the budgets of the governments after the massive pandemic spending splurge.

The German numbers will be closely-followed by the latest employment figures from the UK and the market is expecting growth of 150k jobs for the British economy after the recent upturn created by the economy’s reopening.

Johnson delays the UK reopening

Matt Hancock faced a grilling by MPs at the House of Commons last night, after Boris Johnson delayed the easing of the English lockdown restrictions for up to four weeks. Johnson said it was “sensible to wait just a little longer” and potentially until the 19th of July, as coronavirus cases surged.

The health secretary was asked repeated questions on key issues such as the government’s reasoning for placing India on the red travel list weeks after other nations. This saw thousands of travellers coming in from the country that was having the fastest rise in the world and highlights another inept piece of government pandemic handling

Other ministers were angry over the Prime Minister’s decision to speak to the press about the delay of lockdown easing, and the confirmation of the furlough scheme ending despite many people’s work return date being pushed further out due to the new July reopening target.

Analysis showed England’s rate of infections had climbed to the highest level since the 2nd of March. Some 37,729 new infections were recorded in England, according to Public Health England (PHE). The small delay has not hurt the GBP v EUR and attention returns to the economic data for the day.

The GBP v EUR has resistance at the yearly highs of 1.18, which were set in early-April, while support is at 1.1470.