The pound euro exchange rate has been recovering over the last few days seeing an improvement of over 7 cents since the recent low hit two weeks ago. The pound euro exchange rate had hit the lower levels of 1.05 before the Bank of England intervened by adding a huge amount of Quantitative Easing as well as cutting interest rates to just 0.1%.
This helped support GBP exchange rates against a number of different currencies including vs the US dollar which had hit their lowest level to buy US dollars with pounds since 1985.
The reason for the strength was because it was seen as a good sign that the central bank had intervened and this supported sterling euro exchange rates.
Credit ratings agency Fitch cut their credit rating for the UK’s economy and suggested that UK economic output would drop by 4% largely caused by the uncertainty with the ongoing Corona Virus.
Tomorrow brings with it a new month as well as UK Manufacturing PMI data due at 930am. This will be keenly watched as anything below 50 represents a negative figure for the economy.
Clearly there is an ongoing huge amount of uncertainty globally at the moment so it is difficult to pinpoint any particular trend emerging within the foreign exchange rates sphere. However, the pound has made some strong gains during the last fortnight creating some better opportunities to buy euros with pounds.
Could the Euro Fall Against the Pound?
There are now a total of 4 European countries in the top 6 globally with the most cases caused by Coronavirus. This includes Italy, Spain, France and Germany. With both Germany and France as the leading countries in the Eurozone’s economy this is clearly a big cause for concern.
The Eurozone has also struggled to agree a clear policy between all the countries as to how to financially support the bloc.
As we end the month there is little economy data due out so all eyes will turn to this week’s Non-Monetary Policy ECB Meeting. The central bank has little chance for cutting interest rates further so they could have to consider further Quantitative Easing measures and although tomorrow’s meeting will not involve any change to policy any rumours that further changes are coming could cause an issue for euro exchange rates.
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