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Daily market commentary: The euro has gained more than 0.6% versus the pound



FOREX

The euro has gained more than 0.6% versus the pound so far this week. Sterling was the star performer among G7 currencies during the first four months of the year, supported by the end of political uncertainty over Brexit and the success of the UK’s vaccination program, which gave the country an advantage over the EU on the expected speed of its economic recovery. Meanwhile, the EU is starting to catch up having corrected the mis-management that characterised the early days of its own vaccination program. So, with the prospects of a fast economic rebound already baked into the value of the pound, the currency is not reacting to the publication of strong economic data, while there is ample scope for further euro gains as forecasts are upgraded in the continent.

Ricardo Evangelista – Senior analyst, ActivTrades

daily market analysis

EUROPEAN SHARES 

European shares alongside US futures contracts opened mostly in the green on Wednesday amid resurging risk appetite from investors. Central bank officials in both Europe and the US have continued to play down worries over rising prices, qualifying the current mounting inflation as “transitory”. However, even if central bankers want to reassure traders and sustain market sentiment in the short-term, many investors are already in the future, pricing an inevitable tapering to come. This is likely to maintain a certain bearish pressure on investors’ mid to long term risk appetite, while new highs in the very short-term remain possible. More volatility and/or market directionality can be expected on energy shares this afternoon with the US Crude Oil Inventories release while other investors will be waiting for tomorrow’s batch of major US data. The best European performance still comes from Zurich with the SMI-20 Index trading above 11,300pts with 11,365pts in sight before resistance at 11,525pts.

Pierre Veyret– Technical analyst, ActivTrades


Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.

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Daily market commentary: The euro has gained more than 0.6% versus the pound

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