After a week of ups and downs for the pound and the euro currencies, the two tied the negotiations with the strong pound, but a late rise in the euro saw a last-minute jump against the GBP. Ahead of the week ahead, the pound will look to continue its strong economic performance in the week ahead, while euro investors hope that a late hike will boost the Eurozone economy from its recent weakness and trigger a rebound. Next week will see the German IFO, GDP for the 4th quarter in 2019, unemployment and the harmonized index of consumer price data releases. All of this will have a significant impact on euro support. Meanwhile, GBP will have to wait until Friday to observe its Gfk consumer sentiment index, which will be the only major release of the week.
Euro week ends on late rally, up against GBP, but strong UK performance sees support remain stable
Friday marked the release of some major flash SMEs for both the Eurozone and Germany. February’s production, services and composite PMI data were revealed. For the Eurozone, positivity spread across the board, with all the figures showing an increase in the previous month. Meanwhile, for Germany, their manufacturing figure has increased, which will be a relief to EUR investors after months of difficulty following the coronavirus epidemic that has eased Chinese demand. But German data also revealed stagnation in the composite figure and a recession in the service sector. The general tone of the publications was however positive, as the euro has struggled to find collection points in the last few weeks, hitting above all forecasts is cause for slight celebrations as the currency could have found a recovery point .
This week also saw numerous UK releases, as well as the consequences of last week’s cabinet reshuffle and higher public spending proposals. The pound has certainly outperformed the two currencies, but a recent rally from the euro following the success of economic data has seen the pound falter against the euro, but markets predict that the pound will remain well supported in the new trading week. Data released in the UK this week showed positive hikes across the board that helped the currency remain trading near the top of the major currencies as the week came to an end.
Data Release Next week is set to Shift Euro, GBP will see little data
Next week will see the German IFO, GDP for the 4th quarter in 2019, unemployment and the harmonized index of consumer price data releases. All the publications cited will have a significant effect on both the German economy and the Eurozone economy. If the reported data showed positive results, the euro is likely to continue its rally and rise higher than the GBP. Meanwhile, GBP will only have a major release of data coming in Friday next week in the form of a Gfk consumer confidence survey. Markets have predicted relatively flat figures for this release, so the focus will likely remain on the euro.
Brexit will however maintain its position among the stocks while negotiations on the EU-UK trade agreement continue and the ongoing coronavirus outbreak will continue to dominate the stocks, with economic effects felt by many countries around the world. Any suspension of the disease is likely to help revive the global economy and allow investors some breathing space as market risk sentiment will likely return.
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