Last week’s high: €1.1430
Last week’s low: €1.1185
Pound Rebounds vs. Euro
After struggling for the first half of last week, GBP/EUR surged on Friday thanks (in part) to Bank of England (BoE) official Ian McCafferty.
As well as asserting that he would still be voting for higher borrowing costs at the next BoE meeting, McCafferty implied that the central bank should consider winding down its quantitative easing programme.
‘Given that other central banks are thinking about it, I think it would be remiss of us not to at least think about it. I think it’s a question that needs a bit of asking.’
Meanwhile, speculation about the European Central Bank’s (ECB) plans for quantitative easing put the Euro under pressure.
According to recent reports, the ECB is planning to keep its asset purchase scheme open-ended amid concerns it may have to backtrack on tapering plans if the Eurozone economy falters.
The GBP/EUR exchange rate was also able to advance to a three-week high thanks to positive progress in the UK’s Brexit negotiations. The UK Government appeared to be taking a softer stance on the subject of the nation’s financial obligations to the EU after its exit, and this change in tone was viewed as being positive for the future progress of Brexit discussions.
Euro Outlook: Inflation Data Ahead
If today’s final Eurozone inflation figures for June are negatively revised, it will further reduce the likelihood of the European Central Bank (ECB) making any adjustments to monetary policy, potentially leaving the Euro weaker in the process.
As it stands, year-on-year CPI is expected to be revised from 1.4% to 1.3%.
Other key Eurozone data to be aware of this week includes tomorrow’s ZEW economic sentiment survey and Thursday’s consumer confidence figure.
The ECB is also due to deliver its latest interest rate decision on Thursday, but no adjustments are expected to be made. If President Mario Draghi adopts a cautious tone on the subject of revising stimulus, EUR exchange rates could tumble.
10:00 Eurozone Consumer Price Index (Final)
09:00 ECB Bank Lending Survey
10:00 German ZEW Survey (Current Situation)
10:00 Eurozone ZEW Survey (Economic Sentiment)
10:00 German ZEW Survey (Economic Sentiment)
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