There was a lot of pressure on the Pound on Tuesday after the GBP to Euro rate fell to a two-week low, following continued friction between the UK and the EU.
The ongoing problems relating to the removal of border checks by Boris Johnson and the European Commission President refusing to make changes, things are looking frail and that is leaving investors concerned. However, at the end of trading the currency finished at 1.1578 against the Euro and 1.415 against the US Dollar.
As the German IFO Survey came in above expectations, the Euro gained some support yesterday and this helped to offset the German GDP figures, which showed a larger-than-expected contraction in domestic growth. As more countries continue to open, it’s likely that the Euro could continue to move upwards today, especially as there is a lack of data releases.
The US Dollar trended lower during the European trading session as demand for the Greenback was limited due to the Federal Reserve being likely to continue it’s accommodating stance. This was then reinforced by dismissed concerns about the speed of US inflation, hinting that the latest increase in inflation is not a sign of excessively high inflation.