The Pound Euro exchange rate fell by -0.3% today after the single currency received a boost from encouraging Eurozone economic data. Today saw the Eurozone’s latest retail sales report for March beat forecasts and rise by 12% month-on-month. This has left the pairing currently trading around €1.15 at the time of writing.
Today also saw German factory orders jump for their third month in a row, as the Eurozone’s powerhouse economy’s manufacturing sector continues to improve.
Analysts at Bloomberg commented:
‘Demand for machinery, data processing equipment, electrical and optical goods as well as car manufacturing was particularly strong, the Economy Ministry said. Helped by strong recoveries abroad, German manufacturing has held up well during the latest rounds of restrictions to limit the spread of the coronavirus.’
Consequently, EUR has risen against the Pound as optimism in the Eurozone’s economy continues to improve as the EU ramps up its Covid-19 vaccination programme.
The Eurozone’s economy is now expected to recover in the coming months as many European countries are preparing to further ease coronavirus lockdown restrictions.
Meanwhile, the Pound (GBP) failed to rise against the Euro today despite the Bank of England (BoE) predicting a pick-up in growth for the UK economy.
The BoE has also cut its unemployment forecast, buoying confidence in the UK’s labour market as job the nation’s unemployment falls as the economy cautiously reopens.
The BoE said:
‘The furlough scheme, alongside a projected recovery in activity and demand for labour, is expected to support employment. Job vacancies – an indicator of labour demand – had already begun to pick up during Q1.’
According to the BoE, the UK economy is now set for its strongest economic growth since World War II.
Looking ahead to Friday, Euro (EUR) traders will be awaiting the latest German trade and industrial production data for Mach.
Any further signs of the Eurozone’s economic recovery would be EUR-positive.
The Pound Euro exchange rate could head higher, however, if tomorrow’s publication of the UK Construction PMI for April confirms forecasts and rises to 62.3.