The Euro Pound (EUR/GBP) exchange rate is steady this morning after the latest inflation data from Germany met forecasts.
The Pound has also found itself supported following the GDP data from the UK during Q1, with the EUR/GBP pairing currently trending around 0.8586.
Euro (EUR) Supported by German Inflation Rate
The Euro has been able to limit any losses against the Pound this morning following the latest inflation rate data from the Eurozone’s largest economy, Germany, which came in above forecasts at 2% during April.
Further supporting the Euro today are the latest industrial production figures from the Eurozone which came in above forecasts at 1.0% during March.
The rise in inflation and industrial production comes as this morning the European Commission (EC) raised its growth forecasts for the year.
The EC now sees the Eurozone economy expanding by 4.3% in 2021, rising significantly from the previous forecast of 3.8%.
Paolo Gentiloni, the EU’s economics commissioner commented on the latest projections saying:
‘The shadow of Covid-19 is beginning to lift from Europe’s economy. After a weak start to the year, we project strong growth in both 2021 and 2022. Unprecedented fiscal support has been — and remains — essential in helping Europe’s workers and companies to weather the storm.’
Pound (GBP) Steady Despite Fall in UK GDP During Q1
The Pound is being supported against the Euro today despite a fall in UK GDP during Q1 as ‘all signs’ point to a swift recovery from coronavirus in the coming months.
Although GDP fell 1.5% during Q1 as the UK was put back into stricter lockdown measures many economists have remained optimistic surrounding the UK’s economic recovery.
Alpesh Paleja, lead economist at the business group CBI, commented on the latest GDP figures from the UK saying:
‘While latest data confirms the economy was hit once again by a renewed lockdown at the turn of the year, the fall in activity was much smaller compared with spring 2020. Households and businesses have clearly adapted better to working and living under Covid restrictions, despite the brutal cost of doing so.’
Pound Euro Exchange Rate Outlook: UK Lockdown Easing in Focus
In absence of any notable data from the UK and Eurozone in the coming days investors instead will keep an eye on any coronavirus developments heading into the weekend.
As much of the UK prepares to ease restrictions further from the 17th May investors will be focusing on any spikes in cases or deaths that could damage the UK economic recovery from the virus.
Euro traders will be focusing on the US Dollar’s movement in the coming days, a cautious market mood could cause the US Dollar to head higher and push down EUR.