Market Analysis – EURGBP
The price movement of the exchange rate during this morning’s Asian session is trading in favour of the Euro for the third consecutive day. Though it should be noted even though the price movement has been moving in favour of the Euro over the past three consecutive days, the momentum each day is decreasing and has yet to break out of any resistance levels. Traders are looking for further market drivers which are likely to come in the next two days as the market is releasing over ten major economic figures related to the Euro.
All the latest news from the UK has been positive. Quarantine measures were significantly relaxed: hairdressing salons, beauty salons, and entertainment establishments were opened. Also to improve the epidemiological situation, macroeconomic indicators are stabilizing. For March, the number of unemployed increased by 10.1K, which is significantly less than 86.6K for February. The indicator of changes in employment over the past 3 months also demonstrates a decrease in the number of unemployed by 73K people. Thanks to this, the unemployment rate fell to 4.9%, while analysts had expected the rate to increase to 5.1%. Though it should be noted that the Prime Minister did confirm a third wave is almost certain.
Yesterday, the World Health Organization noted that the epidemiological situation in the EU continues to deteriorate. Over the past two weeks, the number of new cases detected has increased by 6%, and the death rate has risen by 5%. Significant supply disruptions to the EU vaccine from AstraZeneca continue. Vaccine campaign rates remain poor, although the European Medicines Agency recently re-approved the use of the Johnson&Johnson vaccine.
The EMA recognized the connection of a single vaccine Johnson&Johnson with occasional blood clotting problems, but said that the benefits of a single injection outweighs its risks. Today, the Eurozone authorities agreed to resume the supply and use of the vaccine, which should help reduce the incidence of coronavirus in European countries. The German Ministry of Health announced that the new vaccine will be received by the federal states in a week. The Netherlands and Italy also announced the imminent resumption of vaccination.
Most likely, the main event of the day is likely to be the European Central Bank’s conference, who is also going to release their Monetary Policy Statement. It is expected that the regulator will not change rates and current monetary policy, but may hint to further actions in the future. Even though such comments may not currently physically affect the Euro, it can affect the sentiment and demand levels in the shorter term. In addition to the Central Bank activity, tomorrow morning the IHS Markit will release PMI figures for the individual states within the European Union, where the market will mainly be focusing on Germany and France.
When looking at the movement of the currencies individually we can get a better understanding of the individual movement, not only the EURGBP exchange rate. Looking at the Euro Currency Index, we can see yesterday the asset had both positive and negative movement as the currency was generally showing volatility in multiple directions; this morning the index is showing a slight loss. Looking at the performance of the Pound we can see the asset is increasing in value against the US and Australian Dollar, but is declining against the Japanese Yen.