The end of last week finished on a positive note for the euro as two pieces of key data came out as anticipated. Germany GDP data came out as forecast at 2.3%, whilst Eurozone inflation fell 0.1% but as expected from 1.4% to 1.3%. This summed up the week as markets were fairly quiet and moved very little throughout.
EUR/GBP looks to be carrying on its positive run from last Thursday as it broke below the 0.88 on Friday after positive comments from the UK cabinet on their most recent Brexit plan. Labour leader Jeremy Corbyn is due to clarify his Brexit policy today, whilst the UK Prime Minister, Theresa May, is due to speak on Friday which is likely to include many compromises after recent pressure from Conservative back benchers. Investors will be watching May’s speech on Friday closely with plans regarding the Customs union being one of the main areas of concern. It will be interesting to see whether Labour will outline and propose a full, tariff-free access to EU markets, and in turn, this is likely to force May to seek a similar free-trade agreement herself. Another key point to look out for and perhaps more crucially, is how the European Commission react, only then can we gauge how realistic Mrs May’s proposals will be.