On Monday, July 5, the exchange rate of the GBP/EUR traded 0.50% higher as demand for the British currency grew. It is due to UK Prime Minister Boris Johnson’s awaited pandemic curb announcement.
The Pound has risen on renewed confidence in the United Kingdom’s economy with the easing of lockdown restrictions this month. It is the government’s move to further boost the country’s economic recovery in the succeeding months.
Meanwhile, UK lawmakers have received heavy criticism over its conflicting statement on wearing masks. Additionally, the rising number of coronavirus infections threatens the National Health Service’s ability to cope with the new hospitalizations.
On Monday, the government reported 27,334 new daily cases of COVID-19. This is its second-highest daily total since the end of January. However, the hospitalizations and deaths of the positive case remain relatively low.
Meanwhile, GBP traders are still confident that the easing of pandemic curbs later this month will be pushed through.
On the other hand, the Euro fell after the dovish comments from the European Central Bank President last week.
ECB Chair Christine Lagarde stated that the Eurozone’s economic recovery is still fragile despite the region’s vaccination program.
Also, the latest eurozone economic data pointed to a delay in Germany’s latest Purchasing Managers’ Index composite for June. Last May, it fell to the 60.1 mark against the analysts’ forecast of 60.4. This left some investors worried about the outlook for the EU’s largest economy. Yet, the viewpoint for the Eurozone’s economy remains positive as the PMI data point to a strong recovery in the region’s key economies.
In addition, the EUR/GBP exchange rate is likely to edge higher later this week.
On Tuesday, the USD fell as the Dollar Index, which trails its six other rival currencies, slipped 0.28% to 92.157.
Also, the USD/JPY traded 0.11% lower to 110.84 while the USD/CNY pair traded 0.01% higher to 6.4635, the same with the EUR/USD, which jumped 0.30% to 1.1893.
Moreover, the AUD/USD soared 0.80% to 0.7590 after the Reserve Bank of Australia announced an extension of its quantitative easing program. In addition, the bank stated that it expects to keep the interest rates low until 2024.
Furthermore, NZD/USD sharply rose 1.10% to 0.7099 following the survey of the New Zealand Institute of Economic Research that was published on Tuesday. It showed that more companies expect an improved business climate which brings forward the country’s expectation of its first interest rate hike by the end of 2021.
Additionally, NZIER published the business confidence index, which jumped from the first quarter’s 13% contraction to 7% growth in the second quarter of 2021. This improvement prompted the Auckland Savings Banks to pull forward its interest rate hike expectation of November.