The EUR has found some support during Tuesday’s trading, following some heavy losses against Sterling last week.
GBP/EUR rates moved above 1.15 at last week’s low for the single currency but today’s recovery has seen it realign its position around 1.14.
The reason Sterling gained plenty of support last week was a strong run of UK economic data. Positive Unemployment figures, strong Retail Sales numbers and an indication from the Bank of England (BoE) that they may look to raise interest rates over the coming months, all helped to drive investor confidence in the Pound.
This positive feeling was cemented as reports regarding a Brexit transitional deal surfaced. These reports were confirmed, with the UK & EUR all but agreeing the terms of the deal, which included access for the UK to the single market & customs union during the two year period.
It was for these reasons, rather than a drop in confidence in the EU, which was the catalyst for last week’s downturn in my opinion. Similarly it seems as though a sell of Sterling position has caused today’s realignment, with little Eurozone data of note to drive investor confidence in the single currency.
It has been a slightly different trend on EUR/USD rates, with the Euro holding its positon against the greenback over recent days. It has seen its value dip slightly today but is still trading around 1.24.
The USD is having a mixed run at present but with the Eurozone not yet hit with President Trump’s trade tariffs, it seems to have found some support amongst investors in the short-term.
Looking ahead and economic data is extremely sparse for the Eurozone in the lead up to the Eater bank holiday weekend and as such, Thursdays UK Gross Domestic Product (GDP) figures are likely to take centre stage. Expect any figure outside of the expected 0.4% growth to have a knock on effect for EUR exchange rates.
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