Euro Higher Against the Pound for the Week but Range Holds

Euro Higher Against the Pound for the Week but Range Holds

The EURGBP exchange rate was -0.05% lower on Wednesday after the German economy saw inflation and employment data supporting the single currency this week. Inflation data was at its highest level since 2018, while German employment saw its best May performance since 2012. The country’s economy has also seen its GDP forecast raised by government economic ministers.

The EUR to GBP rate is trading at 0.8624 as traders keep the EUR to GBP pair contained in the range that has held since the early-April lows.

UK Announces Zero Coronavirus Deaths

The UK has seen zero daily COVID-19 deaths for the first time since July last year, according to BBC. Official figures showed that all four nations had recorded no new deaths “within 28 days of a positive test,” while there were 3,000 new cases of the virus. The latest figures mean that the UK total number of deaths held steady for the first time since 30th July 2020.

Separate figures published by the Office for National Statistics showed that there were over 150,000 deaths registered in the UK where the coronavirus was mentioned on the death certificate. UK Health Secretary Matt Hancock said the vaccines were “clearly working”.

Scotland’s first minister, Nicola Sturgeon, paused plans to ease virus restrictions in large parts of the country, saying that Scotland was still at a “delicate and fragile point”. In an announcement, she confirmed that restrictions in Glasgow, which had been the strictest in Scotland, would be relaxed, but other parts of the country would remain under restrictions.
Britain’s strong economic performance has been blighted by the latest spread of virus cases and fears over further lockdown measures.

German Data Dominates Euro V Pound

German inflation rose to 2.4% in May, which is the highest rate in over two years and the data has supported the euro with traders uncertain that the ultra-loose monetary policy stance can hold steady for the long-term. The German economy also saw employment posting its strongest May since 2012 as the labour market continues to recover.

The German economy should grow between 3.4% and 3.7% this year, according to Economy Minister Peter Altmaier, which was a more upbeat assessment than when the government raised its forecast at the end of April.

“We expect the German economy to grow somewhere between 3.4 and 3.7 percent this year. If things go very well, maybe a tenth or two more. And we expect it to grow by 4% next year,” Mr Altmaier said.

At the end of April, the German government raised its growth forecast to 3.5% from a previous forecast of 3%. The economy slumped by 5% as restrictions continued to bite into Europe’s largest economy.

The EURGBP has jumped above the 0.8600 level once more and resistance is at the 0.8700 highs from April.