GBP/EUR Exchange Rate as UK Economic Optimism Fuels April’s Car Sales
The Pound Euro exchange rate rose by 0.2% today after The Society of Motor Manufacturers and Traders Ltd (SMMT) revealed a rebound in UK car sales in April. The pairing is currently fluctuating around €1.15.
Sterling has continued to rise against the single currency this week after the SMMT reported a lift in car registrations this year as the outlook for Britian’s economy improves.
SMMT commented on the data:
‘Demand is likely to be driven by a broad range of new models and powertrains, with confidence bolstered by the gradual reopening of the country.’
The UK’s Covid-19 situation continues to show signs of improvement, with daily cases significantly down compared to last week.
Daily cases are currently at 1,946, -739 compared to last week. Daily deaths are also in single figures.
This week also saw Neil Ferguson, the Government’s key adviser on epidemiology, comment that he was more optimistic about Downing Street’s efforts to combat the Covid-19 crisis.
Vaccinations have also helped to improve the outlook for the UK’s economy in the coming months.
Euro (EUR) Exchange Rate Dips Despite Stronger-Than-Expected Eurozone PMI
The Euro (EUR) failed to rise against the Pound (GBP) today despite a stronger-than-expected Eurozone PMI composite figure for April.
The figure beat forecasts and rose by 53.8, buoying confidence in the outlook for the Eurozone’s economy.
Chris Williamson, Chief Business Economist at IHS Markit, commented on the data:
‘April’s survey data provide encouraging evidence that the eurozone will pull out of its double-dip recession in the second quarter. A manufacturing boom, fuelled by surging demand both in domestic and export markets as many economies emerge from lockdowns, is being accompanied by signs that the service sector has now also returned to growth.’
However, the Euro’s strength has been undermined by growing demand for the ‘Greenback’, as risk sentiment continues to fluctuate over uncertainty over India’s Covid-19 situation.
GBP/EUR Exchange Rate Outlook: Could Sterling Rise on a Hawkish BoE Monetary Policy?
Pound (GBP) traders will be eyeing the Bank of England (BoE) tomorrow as it reveals its latest interest rate decision.
Although the bank is largely expected to hold its interest rate at 0.1%, we could see the BoE express a more bullish policy stance.
As a result, the GBP/EUR exchange rate would head higher on an improved outlook for the UK’s economy.
Meanwhile, the Euro could struggle tomorrow if the European Central Bank’s (ECB) President Christine Large expresses any pessimism about the outlook for the Eurozone’s economy this year.