GBP to EUR Waits for Data After Sterling Rebound

The GBP to EUR exchange rate is flat in early Monday trading, as the pair awaits some data releases this week. It could be a decisive one for the currency outlook after last week saw the British pound rebound sharply from losses earlier in the week.

GBPEUR could see a quiet Monday session as it trades at 1.1680, near the recent highs above 1.1700. German unemployment and inflation alongside Eurozone inflation will be the headline data this week.

Financial Services Agreement Boosts the Pound

Sterling was boosted after London reached an agreement on financial services cooperation with Brussels.

The memorandum of understanding still needs to be signed, but it states that it will “create the framework for voluntary regulatory cooperation” and also create a regulatory forum for dialogue on financial services matters. The sector was left out of Brexit talks and wasn’t a major threat, but recent trends have shifted from the City of London, while the EU and UK have been embroiled in arguments about fishing and vaccine exports.

The Netherlands took London’s crown for share trading volume in recent months and city financiers were worried that the UK could let its dominance slip without firm cooperation. The full text of the agreement should be published before the end of March deadline. Financial services makes up 7% of UK Gross Domestic Product (GDP) and 10% of tax receipts.

EU Plays Down Vaccine Threats Before Data

EU Commission Chief Ursula Von Der Leyen has been warned that vaccine export threats could open up a “pandora’s box” if it goes down that road.

Analyst James Crabtree told CNBC’s Squawk Box: “This is, of course, very dangerous because the EU is normally one of the most responsible international actors.”

The EU’s trade chief, Valdis Dombrovskis, said it is “highly unfair” to accuse the bloc of vaccine nationalism, adding that they are “one of the largest vaccine exporters.”

The news will likely rumble on as both sides continue with their programs, but the UK is moving soon into offering the under 50s age group and is probably not at risk of reversing its lockdowns with the high proportion of deaths coming in the 70s and upwards age group.

The EU will remain under pressure due to recent lockdowns, with France extending its restrictions. Germany has put the country on a high risk list and this could create further issues for haulage and other border crossings.

The recent export arguments between the UK and EU are still festering after EU Commission Chief Ursula Von Der Leyen said AstraZeneca had to “…honour the contract it has with the European member states, before it can engage again in exporting vaccines”.

On the data front, the Eurozone will see consumer confidence from the bloc, with regional updates from Spain and France. The headline number will be the German inflation rate with markets expecting a number of 1.7%, up from 1.3% in the previous month.

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