EUR GBP Holds 0.8400 with Stocks at a Record High
The EURGBP exchange rate started the year trading slightly higher than 0.8400, which has the potential to be a near-term low in the euro. Today will see French inflation numbers and the latest unemployment figures from Germany. The UK is still dealing with extremely high case rates, and although the variant is mild, there are large numbers testing positive and isolating.
The EUR to GBP rate is looking for a catalyst to hold support with the resistance at 0.8470 being the first target and stock markets have started the year positively.
European stocks start the year at record highs
Global stock markets started 2022 positively on Monday after a third consecutive year of double-digit gains, while the dollar and oil prices were also higher.
London traders have one more day off, but Europe started strongly, with the STOXX 600 index hitting a record high after manufacturing data from the euro zone and eastern Europe.
The euro zone’s Manufacturing PMI dipped to 58.0 in December from November’s 58.4, but it matched analyst estimate despite the recent surge in coronavirus cases and still comfortably higher than the 50 level, which defines expansion.
“We’re seeing some tentative but very welcome signs that the supply chain crisis which has plagued production lines all across Europe is beginning to recede,” said Joe Hayes, senior economist at IHS Markit.
“Easing inflation rates are again a welcome sign, but we’re still in hot territory,” Hayes added.
Data for manufacturing orders were sharply higher in Poland, Czech Republic and Hungary. It’s possible that higher energy prices are seeing businesses turn to manufacturers outside of the largest economies.
UK tech sector sees a record year, EU set for power struggle
The technology sector in the UK saw a record year with start up businesses attracting more capital than ever. In what was its best year since 2014, over £24 billion was raised, according to figures released by the Government’s Digital Economy Council.
The figure is double the sum raised the year before, with venture capital flowing into online platforms like car-seller Motorway, and the second-hand clothes site Depop, alongside banking challenger Starling Bank.
Beauhurst data also showed that US investors launched a large raid on British technology companies in 2021. A total of 130 UK tech firms were acquired by US investors in 2021, up from 87 the year before and above the previous record of 105 in 2018.
Elsewhere, Professor Iain Begg of the London School of Economics and Political Science said that Europe could see a power struggle as Germany and France look to consolidate power after Angela Merkel’s departure.
New Chancellor Olaf Scholz’s plan will be “about achieving the long-term European ambition”, but that could lead to friction with other member states if France and Germany try to lead the bloc.
He said there would be “pushback on this from countries like the Netherlands, or Sweden.”
He said that these nations “have been uneasy sometimes about initiatives coming from Paris and Berlin”.
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The post EUR GBP Holds 0.8400 with Stocks at a Record High appeared first on Euro Rate Forecast.
Source: https://www.eurorateforecast.com/2022/01/eur-gbp-holds-0-8400-with-stocks-at-a-record-high/
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