- EUR/GBP has dropped below 0.8700 for the first time since May 2020 in recent trade.
- The pair is weighed again by strong GBP performance amid ongoing vaccine/reopening optimism.
EUR/GBP has come under selling pressure in recent trade, likely as a result of an increase in volumes ahead of and during the 4pm London Fix. The pair has managed to break below the 0.8700 level for the first time since May 2020, quite a reversal from earlier session highs of closer to the 0.8740 mark set prior to the start of US trade.
Driving the day
Ongoing optimism regarding the state of the UK’s vaccination efforts and prospects that the country will soon be able to ease lockdown continues to underpin GBP, hence why it sits near the top of the G10 performance table for a second consecutive day this Tuesday.
GBP outperformers the euro for this very same reason (and the fact that the EU’s vaccine rollout has been comparatively sluggish). But the euro is not a bad performer on the day. Indeed, though it is lower versus GBP, it is flat versus USD, NZD and AUD and stronger versus CHF, JPY and CAD.
A few positive factors might be supporting the euro on Tuesday (or, at least discouraging the bears from selling). First of all, data has been strong; the headline German ZEW Economic Sentiment index rose to 71.2 in February, well above expectations for a drop to 59.6 from 61.8. Elsewhere, ILO data released prior to the start of the European session showed the French unemployment rate dropping to 8.0% in Q4 from 9.0% the quarter prior, a massive beat on expectations for the unemployment rate to remain unchanged at 9.0%.
Meanwhile, the second estimate for Eurozone GDP growth in Q4 2020 came in a little stronger than expected, with the YoY growth rate revised up to -5.0% and the QoQ growth rate revised up to -0.6%. Elsewhere, Italy is receiving huge investor interest in its next round of debt issuance, a phenomenon market commentators are attributing to market optimism about the arrival of former ECB President Mario Draghi as the PM of the country.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.
Latest Forex News
Editors’ Picks
EUR/USD: Complex candlesticks trouble bulls above 1.2000, ECB in focus
EUR/USD picks up bids to intraday high ahead of the week’s key event. ECB is expected to offer no fireworks but the BOC move keep momentum traders hopeful. Gravestone, followed by Dragonfly, test bulls between the key SMA, inside monthly rising channel.
GBP/USD trades above 1.39 as the dollar takes a breather
GBP/USD has bounced back above 1.39, recovering as the dollar cedes some ground. The greenback benefited from the risk-off mood, while the pound struggles after CPI missed with 0.7% and as UK PM Johnson warns of winter covid wave.
EUR/USD: Complex candlesticks trouble bulls above 1.2000, ECB in focus
EUR/USD picks up bids to intraday high ahead of the week’s key event. ECB is expected to offer no fireworks but the BOC move keep momentum traders hopeful. Gravestone, followed by Dragonfly, test bulls between the key SMA, inside monthly rising channel.
Enjin Coin price shakes off selling pressure, primed for a 25% rally
Enjin Coin price outlook has shifted to neutral. It is on the verge of completing a high probability bottoming pattern, showing a positive divergence from some of the other cryptocurrencies that have printed new correction lows over the last couple of days.
European Central Bank Preview: Five reasons for Lagarde to lift the euro
The German ZEW Economic Sentiment, the Sentix Investor Confidence and Markit's Purchasing Managers' Indexes have been rising and surprising to the upside in recent months.