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.
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.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.