Listen to the latest market mood for the EURGBP pair.

Weak EUR, Strong GBP

The GBP rose against the EUR yesterday for two reasons:

• Firstly, optimism that the EU and the UK could reach a trade agreement relatively quickly. Boris Johnson suggested an agreement could be reached in July.
• Secondly, jobs data out of the UK yesterday showed that the UK’s furlough scheme has helped prevent unemployment. Britain’s jobless rate held at 3.9% over the three months to April surpassing best expectations.

The EUR is facing pressure as the hotly debated Euro relief fund will be spoken about by EU leaders on Friday. The chances of getting the deal past the ‘frugal four’ (Denmark, Sweden, Netherlands, and Austria) are slim, so the EUR should remain pressured into the weekend against the GBP.

Therefore, expect EURGBP sellers on pullbacks.

We expect this outlook to play out over the next 3 days.

Main Trade Risks

• One risk is if there is some negative Brexit news. That will weigh on the GBP.
• Another key risk is any positive news on the Euro Relief fund.