- Eurozone Economic Sentiment Index data fails to reach the targeted level.
- EUR/GBP sees an uptick.
- Eurozone economy has been experiencing a slow recovery.
The EUR/GBP exchange rate has remained bullish following the latest release of disappointing Eurozone Economic Sentiment index data. This translated to the low momentum for the Euro due to lack of investor interest. This, in turn, gave the Pound Sterling a chance to rally against the Euro. This is despite the fact that there is a planned fiscal stimulus for the Eurozone. Service sector sentiments in the Eurozone indicate that there was an unexpected downturn. Economic activity will likely continue to slow down before the end of Q2 2020.
The EUR/GBP exchange rate was off to a weak bullish start on Friday morning as it carries on with the bullish run that it has been on. On the technical side, the exchange rate is expected to test the 0.9023, and 0.9045 price levels if it trades long above 0.9004.
The Euro has been facing pressure due to the slowing German consumer price index. The Eurozone economic sentiment index gained from 64.9 to 67.5, which is a smaller gain than anticipated. This indicates that the Eurozone’s economic activity is still slow and, as such, not quite favoring the Euro. Meanwhile, the Pound Sterling seems to be benefitting from the latest policy measures implemented by the European Central Bank (ECB).
The Pound Sterling rally and the subdued Euro are responsible for the bullish performance of their exchange rate. It is quite refreshing, especially for the Pound which had a rough couple of months, especially because of the massive hit that the UK economy suffered from the coronavirus.
The Pound has also benefited from less pressure from the Brexit situation as British politicians shift their focus to economic issues. The rally also comes amid eased restrictions by governments, allowing for economic recovery. This has been the case in the UK and thus the rallying Pound.