Crummy UK data brings EUR/GBP hedgers back to play

On Friday the Pound versus the Euro continued to lose ground and eventually that saw the EUR/GBP push above 0.8310 and reach a high, at 0.8322. In fact the EUR/GBP closed out the week right on that high, nearly 100 points above the new 2024 low (0.8225) set earlier in the week. Now in terms of the reciprocal rate, that new 2024 low converted to 1.2158. The close on Friday converted to 1.2016. Prior to this and in many earlier updates, it was noted that natural UK based sellers of the Pound had been hedging their exposure near the 1.20 mark, but as the price lifted above 1.2150 it seemed many of those might be holding off. That is assuming there was more Euro buying required. However, the really crummy UK GDP and manufacturing data seen on Friday changed all that and seemingly delivered another round of Pound sellers. Depending on which analysis one looks at, the net effect of the UK trade deficit with Europe delivers around 110 billion Pounds per year of Sterling outflow and that means there is always demand for the EUR/GBP at certain levels and times during the year. There are a lot of UK data releases this week and the BOE policy decision for the Pound to contend with and there will be much more to add on all that. Overnight the EUR/GBP has traded a range covered by 0.8306 to 0.8327. It is right now at 0.8321