June 22, 2021 - Written by John Cameron
STORY LINK Pound Euro (GBP/EUR) Exchange Rate Rangebound as UK Factory Activity Soars
GBP/EUR Exchange Rate Steady as England ‘on track’ to Lifting Lockdown Restrictions in July
The Pound Euro exchange rate held steady today following the release of the latest UK manufacturing activity gauge for the free months leading to June. Data revealed that factories recorded their fastest growth since at least the 1970s. The pairing is currently fluctuating around €1.16.
As a result, the Pound has benefited from growing confidence in the UK economy ahead of tomorrow’s services and manufacturing PMI figures.
Tom Crotty, Group Director at INEOS and Chair of the CBI Manufacturing Council, commented on the latest manufacturing data:
‘It is hugely reassuring to see the manufacturing sector performing well after a particularly difficult start to the year. There is a real sense of optimism from many in the sector that there are good times ahead.’
Today also saw positive news in the form of Health Secretary Matt Hancock’s comments that UK Covid-19 infections, while rising, were showing some signs of easing off.
Hancock also added that England is ‘on track’ to lift lockdown measures on 19 July but that freeing up international travel would be ‘more difficult’.
Prime Minister Boris Johnson also said that it was ‘looking good’ for removing lockdown restrictions next month.
Consequently, the GBP/EUR exchange rate has remained steady today, with investors slowly becoming more optimistic about the outlook for the UK economy, with some degree of caution due to uncertainty over new variants of the coronavirus.
Euro (EUR) Exchange Rate Steady Despite Upbeat ECB Comments
The Euro (EUR) held steady against the Pound today despite upbeat comments from the European Central Bank’s (ECB) President Christine Lagarde, who said that the Eurozone’s economic recovery is gathering pace.
EUR traders are also becoming more optimistic about the outlook for some of Europe’s key economies, thanks to the European Union’s (EU) extensive Covid-19 vaccination rollout.
Italy is also due to lift out face mask requirements from 28th June.
Italian Health Minister Roberto Speranza said:
‘From 28 June we will leave behind the need to wear masks outside in white zones.’
Covid-19 cases and hospitalisations continue to decline in Italy, one of the worst-effected nation’s within the EU last year.
In Eurozone economic data, today will see the release of the latest flash consumer confidence gauge for June.
Any indications of a fast recovering consumer mood in the Eurozone would prove EUR-positive.
As a result, we could see the EUR/GBP exchange rate begin to edge higher.
GBP/EUR Exchange Rate Forecast: UK PMI Data in Focus
Euro (EUR) traders are awaiting tomorrow’s release of the latest flash Eurozone PMI composite report.
Any signs that the Eurozone’s economy is on the road to recovery would see the Euro to Pound exchange rate head higher.
Tomorrow will also see a key speech from the ECB’s President Christine Lagarde. Again, if she reiterates her hawkish outlook for the Eurozone economy, then we could see the single currency rise against the Pound.
Pound (GBP) investors will monitor the publication of the flash UK manufacturing and services figures for June.
If the outlook for the UK’s two key sectors improves, then the Pound Euro exchange rate could begin to rise.
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TAGS: Euro Forecasts Euro Pound Forecasts Pound Euro Forecasts