The GBPEUR exchange rate is trading at 1.1650 ahead of a quiet day for economic data. The market will focus on a speech by the Bank of England governor Andrew Bailey, while tomorrow will see the release of the latest employment figures for the UK. The pound is under pressure as Boris Johnson is set to confirm that the June 21st reopening will be delayed by four weeks.
The GBP to EUR trades at 1.1650 and the pair has support at the 1.1550 level.
Bailey speech leads into employment, inflation
The Bank of England governor Andrew Bailey is set to talk later and markets will focus on the headlines, but the central banks are coy about indulging any talk of tapering and it may not bring anything tangible for the pound versus euro.
Tomorrow will be more important with the release of the latest UK employment figures, where traders are expecting a print of 150k new jobs added in the UK after the services sector was fired up by the country’s reopening. The number would be an improvement on last month’s 84k jobs, but investors were wary that millions are still on furlough.
Tuesday will also see German inflation numbers, with the reopening in Europe’s largest economy set to see prices jump to 2.5% from 2%. The UK will then see the release of inflation figures on Wednesday and markets have been turning their attention to consumer prices again after a surge in US inflation to the highest level since 2008.
The inflation picture is putting pressure on the idea that price increases are ‘transitory,’ as central bank heads keep trying to affirm.
Virus dominates UK but GDP ahead
Boris Johnson is set to make a major announcement on Monday that the June 21st lockdown lifting will be delayed further, until July 19th.
A two-week review of the measures could be included meaning that virus restrictions could be dropped on July 5th if the data is suitable. The Sun newspaper said on Sunday that the chances of lifting all restrictions as planned on June 21st were close to zero. The country has seen a 240% surge in cases of the virus variant.
The numbers are also a blow for football fans with Wembley set to host some important Euro 2020 matches. Group games will have a 25% fan cap, hopefully rising to 45,000 the Semis and the Final.
Britain reported another 7,490 cases over the weekend, and this is hurting the growth outlook after strong figures were seen for Q1. Data also showed that 78% of the adult population have had a first dose of the virus vaccine, while over 55% have received a second.
The GBP v EUR has resistance at the yearly highs of 1.18, which were set in early-April before the reopening roadmap stalled.