GBP/EUR Exchange Rate Rangebound, UK Covid-19 Infections Fall for Seventh Day in a Row
The Pound Euro exchange rate held steady this morning following the Nationwide building society’s report that UK house price growth had cooled. House prices fell back to 10.5% in July from June’s 17-year high of 13.4%. The pairing is trading around €1.17 at the time of writing.
Robert Gardner, Nationwide’s chief economist, commented on the data:
‘The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6% a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.’
Tom Bill, the head of UK residential research at Knight Frank, said that the UK housing market would ‘continue to be underpinned by strong economic fundamentals’.
However, Bill also added that the ‘distortive effects of the pandemic and stamp duty holiday are fading’.
Pound investors have become more confident about the outlook for the UK economy, however, with daily Covid-19 infection falling for 7 consecutive days.
Nevertheless, Number 10 has urged caution, saying that the latest data has not included numbers since the easing of lockdown measures on July 19. Hospitalisations and deaths from the virus have also continued to rise in the past few weeks.
Euro (EUR) Exchange Rates Steady on Disappointing French and German Consumer Confidence
The Euro (EUR) failed to rise against Sterling today after French consumer confidence worsened slightly this month. According to the French economic institute, Insee, its sentiment indicator fell from 103 in June to 101 in July – just above its long-term average of 100.
Today also saw the release of the latest German GfK consumer confidence survey for August. The figure fell below forecasts, remaining at -0.3.
Rolf Buerkl, consumer expert at GfK, commented:
‘The phase where the decrease of COVID-19 incidence of infection has come to an end and those figures are again on the rise.
‘Despite the current stagnation of consumer confidence, the domestic economy will make a positive contribution to overall economic development in the second half of the year.’
In the absence of any other notable Eurozone data releases today, EUR investors will monitor Europe’s Covid-19 developments.
Any indications of rising Delta coronavirus variant infection rates throughout Europe would drag down confidence in the Eurozone economy’s economy and weaken the single currency.
GBP/EUR Exchange Rate Forecast: Eurozone Business Confidence and German Jobs Data in Focus
Euro (EUR) investors will be looking ahead to tomorrow’s latest Eurozone business and consumer confidence gauge for July.
Could an improvement in consumer and business morale in the bloc see the Euro rise against the major currencies?
Tomorrow will also see the release of the latest German unemployment rate report for July. Any signs of falling joblessness in the largest Eurozone economy would be EUR-positive.
Pound traders will monitor the UK’s Covid-19 developments this week.
If daily infection rates continue to fall, then we would see Sterling head higher on rising confidence in the nation’s economic recovery going forward.
Read More: Pound Euro Exchange Rate Steady As UK House Price Growth Cools In July