The euro continued to drift lower against the British pound on Monday, as investors shifted their attention to a deluge of economic data and events headlined by the European Central Bank.
The EUR/GBP tumbled 0.35% to 0.7217, having bottomed out at 0.72204 in the European session. The pair is trading at four-week lows amid a broad consolidation trend for the euro. The daily trend index is slightly bearish, with 0.7208 being the next critical level. A break below the psychological 0.72 level exposes the 0.7188 support. On the upside, the pair faces initial resistance at 0.7266.
The EUR/GBP has declined more than 1% over the past five days. Both the pound and the euro face downward pressure, especially against the US dollar, which is once again supported by Fed-speak and expectations for a September rate-hike.
In economic data, China posted a dismal trade balance in March, offering further evidence the world’s second largest economy was stalling. China’s trade surplus fell to $3.08 billion from $60.06 billion, the National Statistics Bureau reported on Monday. Exports plunged 15%, while imports declined 12.7%.
There were no major market movers out of Europe on Monday, as the markets turned their attention to a series of other events later in the week. On Tuesday the UK Office for National Statistics will report on consumer inflation. Meanwhile, the Eurozone will release industrial production figures.
The week’s most pressing event comes on Wednesday when the European Central Bank wraps up its April policy meetings. ECB President Mario Draghi is expected to comment on the central bank’s recently implemented quantitative easing program, which appears to be slowly boosting the euro area economy.
Wednesday also features the release of German CPI data for March. In harmonized terms, Germany’s CPI rate is forecast to rise 0.5% month-on-month and 0.1% annually. The European Commission will report on euro area CPI on Friday.
The UK ONS will close out the week with a report on employment. The number of Britons receiving unemployment benefits is forecast to drop another 28,000 in March. The unemployment rate is also forecast to drop to 5.6% from 5.7% in the first quarter.
Average earnings including bonuses is forecast to increase 1.8%, well above the CPI rate. Including bonuses, earnings are forecast to rise 1.7%.