Yesterday, while losing against the pound due to the aforementioned interest rate comments, the single currency spent the day chopping and changing against the US dollar. It retains its overall strength though, very close to a five-month high and within a whisker of its highest rate against USD since 2014.
The big picture is the anticipated rapid recovery from the pandemic, with 41% of Germans, the eurozone’s largest economy, now at least partially protected, and case rates falling dramatically while the UK’s begin to rise.
The key data readings yesterday were a larger than expected drop in German GfK Consumer Confidence for June, which came in at -7 against an expectation of -5.2. Nevertheless, it’s a significant gain on last month’s -8.6.
There was also positive news on unemployment in France – which fell significantly in April – and business and consumer confidence in Italy.
However, data released this morning shows that the pandemic has tipped France into a double-dip recession. GDP fell by 0.10% in the first quarter of 2021, following on from a 1.4% fall at the end of last year.
Look out today for Eurozone consumer confidence at 10am.
