EURGBP Still Hovers in the Middle of Recent Range

The EURGBP exchange rate was 0.09% higher on Monday as traders struggle to decide on the next path for the pair. The April highs in the euro are at 0.8700, while the yearly low is below 0.8500. The euro has been boosted by a rebound in activity in the Eurozone economy, while the UK has moved towards a full reopening of its economy in a month’s time.

The EUR to GBP rate is trading at 0.8612 in early trading and tomorrow will be key with German GDP and UK public sector borrowing figures.

Public health study boost sterling

Public Health England gave the British pound a boost with the latest studies showing that the Pfizer vaccine was successful in fighting the Indian virus variant. Cases had risen to 3,400 in the UK with fears that it could derail the June opening of the economy.

Public Health England said that the Pfizer vaccine was 88% effective against the symptoms of the variant after two doses, while the AstraZeneca version was 60% effective.

On the travel front, Britons have been urged not to go to Spain after Madrid opened its to UK tourists.

The country remains on the Government’s “amber list”, meaning people returning to the UK will need to take tests and self-isolate at home.

Business minister Anne-Marie Trevelyan said: “The Prime Minister has been clear that, for now, amber means ‘please don’t go unless there is an urgent family reason and so on’ because we are still trying to slowly move through our road map to being able to open up on June 21 and we want to do that in a steady and careful way.”

Germany has since put British travellers on the same threat level, with France mulling the same measures and travel between the UK and Europe looks like it will remain challenging in the near future. UK travellers to Germany would face quarantines, while they would also see similar measures on the way back.

German GDP and UK borrowing ahead on Tuesday

The German economy will see the release of GDP figures for Q1 with the country expected to post a year-on-year growth number of -3%, compared to the -3.3% in the previous month as Europe’s largest economy sees an improvement. The EUR to GBP rate could be quiet until the data is released on Tuesday.

German IFO business climate numbers will also be released with the potential for another boost in business sentiment which could add to any GDP improvement.

The UK will also see the release of public sector net borrowing for the month with the country borrowing record numbers for the year since the pandemic began in March. That could weigh on sterling if further borrowing is seen.

The EURGBP has resistance at 0.8700 and support for the year is below 0.8500 but it’s unlikely to see a breakout of those levels this week.

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