The Euro is paralysed against the Pound this morning as global markets avoid making any movements ahead a much anticipated speech by Donald Trump this evening.
Trump is expected to finally unveil some of his economic policies in his first official Presidential address since taking office over a month ago.
Markets were initially upbeat about the election of Trump back in November as it was believed his campaign promises to increase government spending could provide a real boost to US growth.
However investors have grown increasingly impatient over the last few weeks as his administration was reluctant to release its economic plans, instead choosing to focus on its controversial immigration policies, with Trump striking an increasingly isolationist tone.
Should traders react favourably to Trump’s speech then both the Euro and the Pound may weaken as investors flock to the US Dollar in a second ‘Trump Jump’.
Meanwhile if economists are unconvinced by his plans or believe that they are unrealistic then both currencies are likely to see demand spike as markets flee the ‘Greenback
Uptick in Data may Prompt Rise in EUR GBP
The Euro is in a strong position to take advantage of any weakness in the US Dollar today following the release of some positive data from the Eurozone.
French GDP climbed from 0.2% to 0.4% at the end of last year, leading to two consecutive periods of growth after a contraction to -0.1% in the second quarter of 2016, with the rise bring supported by uptick in household consumption and government spending.
Meanwhile Italy also impressed investors this morning as the inflation rate jumped from 1% to 1.5% in February, helping to alleviate concerns that the bailing out of its third largest bank, Monte dei Paschi had negatively impacted the economy.
Brexit Worries Continue to Hamper Sterling
The Pound is likely to struggle to gain against the Euro today as Brexit continues to be a major concern for investors and consumers alike.
This was reflected in the UK’s Consumer Confidence data released earlier this morning as Gfk reported that household sentiment fell from -5 to -6 in February.
Consumers fear that their personal finances may suffer over the coming year as the accelerated rate of inflation and lacklustre wage growth puts more strain on families, while the uncertainty of leaving the EU makes households less likely to make major purchases.
UK GDP Report Ahead
The Euro is likely to be strengthened further by the release of German data tomorrow with resilient unemployment data and an expected rise in the inflation rate likely to drive EUR GBP higher.
Meanwhile the Pound may attempt to mount a recovery following the release of the latest UK housing data with Mortgage approvals expected to have risen from 67.9k to 68.8k at the start of the year.
EUR EUR Data Releases
00:01 GBP BRC Shop Price Index (YoY) (FEB)
07:00 GBP Nationwide House Prices s.a. (MoM) (FEB)
07:00 GBP Nationwide House Prices n.s.a. (YoY) (FEB)
08:45 EUR Markit/ADACI Italy Manufacturing PMI (FEB)
08:50 EUR Markit France Manufacturing PMI (FEB )
08:55 EUR Markit/BME Germany Manufacturing PMI (FEB)
08:55 EUR German Unemployment Change (FEB)
08:55 EUR German Unemployment Rate s.a. (FEB)
09:00 EUR Markit Eurozone Manufacturing PMI (FEB)
09:00 EUR Italian Annual Gross Domestic Product (2016)
09:30 GBP Markit UK PMI Manufacturing SA (FEB)
09:30 GBP Net Consumer Credit (JAN)
09:30 GBP Net Lending Sec. on Dwellings (JAN)
09:30 GBP Mortgage Approvals (JAN)
13:00 EUR German Consumer Price Index (MoM) (FEB)
13:00 EUR German Consumer Price Index (YoY) (FEB)