GBP/EUR climbs above €1.17 on positive UK coronavirus statistics

The pound trended high on Monday, underpinned by optimism over the UK’s latest coronavirus statistics.

Trade in Sterling is a little more mixed so far this morning however, with GBP/EUR flat at €1.1711 and GBP/USD dipping to $1.3798. GBP/CAD is rangebound at C$1.7344 while GBP/AUD and GBP/NZD are buoyed at AU$1.8751 and NZ$1.9785 respectively.

Coming up, will a robust US durable goods reading help to propel the US dollar higher this afternoon?
 

What’s been happening?

The pound opened this week on strong footing, with GBP investors celebrating some upbeat UK coronavirus statistics, which showed that the number of new infections has fallen for five consecutive days.

Capping these gains however were comments from outgoing Bank of England (BoE) policymaker Gertjan Vlieghe, who suggested that the BoE’s current stimulus should remain in place as the UK is still ‘not out of the woods’ yet.

The US dollar, meanwhile, faced some broad pressure through yesterday’s European trading session.

This downturn in USD exchange rates came amid a slump in US Treasury yields, as well as concerns about rising cases of the Delta variant in the US at the same time that the country’s vaccine rollout appears to have stalled.

The pullback in the US dollar, reflected well on the euro as a result of the strong negative correlation between the pairing, helping to offset some of the pressure on the single currency that came in the wake of a sharper-than-expected decline in Germany’s latest IFO business climate index.
 

What’s coming up?

Turning to today’s session the most impactful data release will no doubt be the latest durable goods figures from the US.

This could carry the US dollar higher this afternoon, amidst forecasts for another robust expansion of order growth last month.

Meanwhile, the pound may struggle to maintain its gains going forward as Downing Street warns that daily coronavirus cases are set to rise again once the 19 July reopening starts to feed through into the data.

In the absence of any notable Eurozone data, the direction of the euro is likely to be dictated by European coronavirus headlines, potentially leading to some weakness in EUR exchange rates if cases continue to rise across the continent.