The GBPEUR exchange rate was slightly higher for the week after Boris Johnson updated the country on his July 19th reopening. The Prime Minister has committed to the July 19th date but did not rule out a return of restrictions. The day ahead will see ZEW economic survey updates for Europe and Germany.
The GBPEUR is trading near 1.1670 as the pair looks to make another push for the yearly highs at 1.18.
PM Johnson Outlines Plans
The pound was supported after Boris Johnson outlined plans for lifting virus restrictions in England. The announcement follows the recent comments by Sajid Javid in the House of Commons. Cases in the UK are expected to rise when the rules are eased but ministers have said that the country needs to “learn to live” with the virus after a high vaccination rollout. The last stage of the UK government’s roadmap out of lockdown was delayed in June with the rise in variant cases. The new guidance will take effect from Monday 19th July.
But the PM also noted a cautious tone as he said: “We will continue to monitor the data and retain contingency measures to help manage the virus during higher-risk periods such as the winter”.
That still brings a risk of further restrictions if the virus, or a different version of it, grows after the summer.
“On the irreversibility point, obviously, if we do find another variant that doesn’t respond to the vaccines, if heaven forbid if some really awful new bug appears, then clearly we will have to take any step we need to do to protect the public,” Johnson added.
Economic data ahead for Europe
Tuesday brings economic data for Europe in the form of ZEW economic sentiment figures from the Eurozone and Germany.
The German number is expected to show a dip but this is because analysts are predicting that the economic bounce will level off, just as it did in the UK. The numbers could help the GBP v EUR exchange rate if they diverge from analysts’ expectations.
The more important data point will be the release of the latest UK GDP number on Friday for the month of May. Markets are expecting a monthly average for the three months of 3.9%, up from 1.5% in the previous month. The year-on-year figure is expected to come in at 25.9% as the economic bounce starts to fade from last month’s 27.6% reading.
Britain had a head start on Europe after a faster vaccine rollout and that will still play out in the growth figures. There is also risk for the EU in the coming months if the vaccination program doesn’t pick up to beat the rise in virus variant cases.
The GBPEUR could see the yearly highs tested this week if the economic data supports the pound and Boris Johnson’s apparent commitment to the reopening will also help.