GBPEUR Trades Above 1.16 Before EU Data

The GBPEUR exchange rate was slightly lower as the week started but the pair was still trading above the 1.16 figure. Monday could be a quiet session as the market awaits GDP growth figures from the Eurozone and German ZEW sentiment data.

The GBP to EUR trades at 1.1630 with the pair lower by -0.09% on Monday.

Chinese Trade and Inflation Hits European Stocks

European stocks were down from the recent all-time highs on Monday, with commodity shares leading the dip lower, as traders reacted to weaker-than-expected China trade data and worries about inflation.

Mining stocks fell copper prices dipped after lower-than-expected Chinese exports data stoked demand concerns. Oil and gas stocks were also lower as crude prices dropped ahead of talks this week between Iran and the world over a nuclear deal.

Tuesday will see the release of Q1 GDP figures for the Eurozone, which should clarify earlier estimates of a -0.6% quarterly drop. Germany will also see the release of the latest ZEW economic sentiment figures. Businesses and consumers have been more upbeat lately in Europe’s largest economy but there are some issues after the prolonged lockdowns. Thursday will see the latest European Central Bank interest rate meeting and press conference. Inflation is still a talking point in the world economy and another set of US inflation figures will happen on the same day.

G7 nations also announced a new global minimum corporation tax of 15% on Saturday in a move which could hit tech stocks. Ireland and Luxembourg have been benefactors of the lack of tax transparency.

UK Still Seeing Virus Cases Increase

The UK continues to see a rise in Covid-19 infections with over 5,000 new cases confirmed by Sunday, meaning cases are up 49 per cent over the last seven days.

Government data also said that a further four people had died “within 28 days of a positive test”. The latest figures came after the UK had witnessed no new UK Covid deaths for the first time since the pandemic began.

The health secretary Matt Hancock said that the government’s plans for a final release from the remaining coronavirus restrictions would probably move ahead as planned later in the month if there is no further increase in hospital admissions. But he said it was “too early” to say whether restrictions would be fully removed.

The rise in virus cases is still weighing on the pound sterling, but vaccination rates have helped to ease the concerns. However, immunology expert Professor Sir John Bell said that the UK could be “slammed” by coronavirus variants unless more efforts are made to help poorer nations vaccinate their populations.

The UK economy will see another 3-month average for GDP on Friday and that will give traders another reason to decide on the next path for the GBP v EUR exchange rate.

Sterling versus the euro is consolidating between the 1.18 yearly highs set in early April, and the late-April lows under 1.15.

Get in touch using the form below to discuss these factors in further detail ahead of your currency exchange.

The post GBPEUR Trades Above 1.16 Before EU Data appeared first on Pound Sterling Forecast.