EUR to GBP Rate Hovers at Support Ahead of Data

The EUR to GBP exchange rate is hovering at the key support level of 0.8870 as the pair seeks direction. Economic data this week should provide the stimulus and the price level should decide whether the pound recovery can continue, or whether euro strength returns.

EURGBP was trading 0.10% lower at 0.88830 in early trading on Monday.

France Approaches a Third National Lockdown

A top medical adviser in France has warned that the country is on course for a third national lockdown as cases continue to grow. A strict curfew was imposed on the public last weekend, but the head of the nation’s scientific said that the country faces an emergency and called for swift government actions. The French government is expected to gather on Wednesday and the likelihood is that they will follow other countries into lockdown. This should have an effect on the euro to pound outlook as it will hit the single currency but could also see issues with Britain’s imports once more.

Britain is moving ahead with its coronavirus vaccination program which has already seen over 6 million people get the first of two shots of the vaccine. UK Health Secretary Matt Hancock said on Sunday that three-quarters of the country’s over-80s have now received a vaccination. The same figure applies to nursing homes. With this level of vaccination, the UK is far ahead of the EU in protecting its vulnerable age groups and could be ready to open up its economy sooner. This could fire up the UK economy and factor into the pound to euro rate in the second quarter.

German and UK Data to Drive the EURGBP this Week

The pound to euro exchange rate will see a busy week on the economic calendar and this begins today with German IFO business climate numbers. The IFO index surveys the mood amongst entrepreneurs in the country. A reading of 91.8 is expected, compared to last month and the mood is improving from April’s low of 74.

The German economy sees further data later in the week with consumer confidence numbers and inflation on Thursday and employment numbers on Friday. The latter two will be important because the German economy is expected to see a rise in employment and inflation. The inflation figure is expected to jump from deflationary territory to a reading of 0.7% and that could spur gains in the euro. The ongoing lockdowns could pour cold water on those hopes, however.

A key reading for the EUR to GBP pair tomorrow will be the latest UK employment reading. A loss of -100k jobs is expected This would be an improvement from last month’s -144k number but it highlights that the UK jobs market is still weak. A worse reading could take the wind out of the pound’s recent recovery.

Get in touch using the form below, ahead of this data coming out to discuss these factors and their potential impact on your upcoming currency exchange.

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