The EURGBP exchange rate should be active on Monday with economic data releases.
EURGBP has been turning down recently, breaking lower from an uptrend support line. The pair is testing horizontal support and could look for lower support at 0.8563.
The pair’s first release will be German inflation at 2:00 pm HKT. The forecast is for inflation to remain at last month’s 2.2%. UK employment figures are also released simultaneously, and another uptick in unemployment is expected.
A speech from the Bank of England’s Chief Economist, Huw Pill, could strengthen the British pound. Pill has said that while there is still work to slow inflation, a lighter approach to interest rates could weaken the pound.
Finally, at 5:00 pm HKT, the ZEW economic survey for Germany and the eurozone will be conducted. Both are expected to improve from last month’s figures.
Data last week said Britain’s economy grew by the most in nearly three years in the first quarter of 2024, ending the shallow recession that occurred in the second half of 2020.
According to the Office for National Statistics, the UK’s gross domestic product expanded by 0.6% in the three months to March. That marked the most substantial growth since the fourth quarter of 2021, when it was up 1.5%.
The latest will give Prime Minister Rishi Sunak some small home ahead of a coming election. However, his Conservative party is forecast to face its most significant loss to Labour since the 1990s. The election has yet to be called but is expected to happen in the Autumn.
The Bank of England has also predicted a better outlook for the UK economy, with growth of 0.5% expected in 2024, compared to a previous estimate of 0.2%.