- Improving EU Consumer Sentiment
- Brexit Optimism
- BOE Negative Interest Rate Chatter
EUR/GBP was trying to regain its bullish momentum, Tuesday morning, after grinding lower on Monday. The slide came on the British Pound rebounding from three-week lows against the Dollar amid Brexit optimism.
However, Sterling Weakness now threatens to push the EUR/GBP higher, back to three-month highs. The pair remains bullish as the Euro continues to rebound after a recent pullback from three-month highs against the Dollar.
The Euro was upbeat. Tuesday morning as economic data shows consumer sentiment in the Eurozone is improving after edging to -14.7% against -18% in May. The Pound remains under pressure as the U.K economy continues to struggle in the aftermath of the COVID-19 pandemic.
Brexit uncertainty also continues to weigh heavily on the Sterling sentiments in the market, conversely the bullish momentum on the EUR/GBP pair. The Pound had received some bids on Monday in response to ongoing BREXIT talks between U.K Prime Minister Boris Johnson and his French counterpart Emmanuel Macron.
Talks with European Commission President Ursula Von der Leyen had also raised hopes of an agreement between the U.K and the E.U, helping offer support to the battered Pound. The gains, however, were short-lived as traders turned attention to the dire economic situation in the U.S.
British Industrial output has already registered its largest quarterly decline, affirming the impact of the COVID-19 pandemic. In addition to poor economic data, chatter that the Bank of England may opt for negative interest rates to revitalize the embattled economy also continue to take a toll on the Pound sentiments among traders.
EUR/GBP outlook remains bullish, given the weakness in the sterling pound. Looking ahead, the release of German PMI, as well as the Euro area PMI, should weigh heavily on Euro sentiments conversely influence EUR/GBP direction of trade. Likewise, traders also await the release of the U.K PMI data that should paint a clear picture economic section in the aftermath of COVID-19.