After a busy day of date releases yesterday, GBPEUR continued on its bullish path, hitting highs just above 1.1250 which was last seen in June this year. Alarm bells have been set ringing at the European Central Bank, with data showing deflation within the Eurozone to be a possibility. This morning however, German retail figures released showing yearly spending within the sector have increased more than expected and has pulled the pair down to 1.1230, at the time of writing.
Sterling traders continue to side-step the fears of what is coming up to the crunch period, once again, in the trade negotiations with Europe. With little in the way of positive news stories to show that the two sides are on course for an agreement, GBPEUR will remain sensitive to any snap headlines.
Cable pushed to a fresh 2020 high, touching 1.3488 before being sold from the key resistance level, last seen in December 2019 after the UK general election. This push was seen off the back of the Bank of England reporting a rise in the demand for cheap credit and a flourishing housing market. Figures released by Nationwide back this up this morning, stating house prices within the UK have risen at 2% for the last month. This therefore makes it the highest monthly gain since February 2004, some 16 years ago.
It is also worth noting that during yesterday’s trading, the softer US dollar allowed EURUSD to run to 2-year highs, touching 1.20 before being sold off by more than a cent. Meanwhile down under, Australia has entered into recession, after the worst quarterly economic reading due to the Covid pandemic.
Today just after lunch UK time, BOE governor Andrew Bailey will testify before the Treasury Select Committee. The talk will cover the economic impact of the Covid outbreak, and may lead to more hints about policy moving forward.
Have a great day.
Author: Jack Nicholls, Relationship Manager
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