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GBPEUR Nears 1.1500 Ahead of Eurozone GDP

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The GBPEUR rate is 0.13% higher on Tuesday as traders get ready for the latest Eurozone GDP numbers. ZEW sentiment will also be seen for the bloc, alongside the German version of the reading.

GBP to EUR is trading at 1.1475 with the 1.1500 resistance level just ahead. A break above that level would be significant for sterling.

Eurozone GDP Released on Tuesday

The Eurozone sees the release of fourth quarter GDP figures today and market analysts are expecting a year-on-year drop of 5.1%, with a quarterly drop of -0.7%.

The latest figures could highlight a gap with the UK, where Britain saw a quarterly growth of 1.2%. The Eurozone will need to close this gap today or we could see sterling advancing further.

Tuesday will also bring the release of ZEW Economic Sentiment figures for the Eurozone and Germany. Sentiment numbers have been less powerful in recent months as the mood amongst investors and consumers during the lockdowns has been more negative and short-term orientated.

The EU GDP numbers could be a significant driver for the GBPEUR today as the UK economy is on a path to reopening its economy. The Eurozone will need to show good results for Q4 or they could risk falling behind in growth.

The UK will see the release of inflation figures on Wednesday and this is another number that could move the pound to euro rate. The market is expecting a print of 0.5%, with a 1.3% reading for the core number. Both are expected to be 0.1% lower than last month due to the lockdowns, but the country could see the number picking up in the months ahead with a reopening. The Bank of England noted that UK savers have £125bn of “pent up savings” and this would support higher prices.

Boris Johnson Accused of ‘Shifting the Goalposts’

Britain’s Prime Minister Boris Johnson has been accused of shifting the goalposts once more on the lockdown after he talked of infection rates falling to “really, really low” levels before restrictions could be eased.

In a statement at Downing Street, the PM said: “We want this lockdown to be the last. And we want progress to be cautious, but also irreversible.”

Britain has now vaccinated a quarter of its citizens with a first dose of the vaccine and Johnson will address the nation on the 22nd of February to give his “roadmap” for opening.

The initial plan is to get kids back to school in March and open up other areas, such al fresco dining events in April. The UK needs to remain on the path to opening up in March, which will also coincide with the March 4th budget. That would see twin engines fired up for the economy and the pound sterling could make a move higher against the euro.

Johnson would have the ideal opportunity to get a head start on the EU economy after all his bluster, but he is already hinting at backtracking on his plans. Markets will be looking to the next announcement for indication of how quickly we can expect to get back to some for of economic normality. If you have an upcoming currency exchange this announcement is one to look out for. You can also get in touch with us using the form below ahead of this to see how sterling exchange rates will be impacted so you can plan ahead.

The post GBPEUR Nears 1.1500 Ahead of Eurozone GDP appeared first on Pound Sterling Forecast.


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