The Pound Euro exchange rate rose by 0.5% today as optimism in the
UK economy continues to grow. The EY Item Club predicts that the economy will recover to pre-pandemic levels by year-end. The pairing is currently fluctuating around €1.16.
Sterling has benefited from the EY Item Club’s view that the British economy is growing at its fastest pace in 80 years. The leading economic forecaster’s senior economic advisor commented: ‘Face-to-face parts of the economy means the UK should have a correspondingly faster recovery.’ This month’s lifting of lockdown measures has continued to contribute to growing confidence in the outlook for the UK economy, buoying the EUR/GBP exchange rate.
UK Covid-19 infections have also fallen five days in a row for the first time since February. Sunday saw the UK record 29,173 new cases, down from 48,161 on July 18.
Euro (EUR) Exchange Rate Falls, German Business Climate Data Falls Below Forecasts. The Euro (EUR) fell today following the release of the latest German IFO business climate and expectations data for July.
All of the IFO gauges showed an unexpected decline in German business morale. As a result, EUR investors have become more concerned about the outlook for the Eurozone’s largest economy. Ifo President Clemens Fuest commented: ‘Companies evaluated their current business situations as somewhat better, but their expectations for the coming months were significantly less optimistic. Supply bottlenecks and concerns over newly rising infection numbers are weighing on the German economy.’
However, confidence in the Eurozone economy is steadily returning now that key economies reopen and business activity begins to boom.
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