The pound to Euro rate has risen higher in the last few weeks as investor concerns over what lies ahead for the world as a result of the COVID-19 pandemic take further shape. Both the pound and the Euro have at different times reacted differently to the news, with both currencies falling and rising in value as events develop.
The Euro has been in the news a fair amount as investors try to better understand what the overall plan is by Eurozone leaders to try and tackle the debt crisis. The economic uncertainty which has lockdowns in Europe, are indicating some tough months ahead, and is reigniting previous fears over Eurozone debt.
Spanish GDP was reported in the Financial Times to be predicted to fall between 10 and 15% for this year, creating a massive increase in their debt to GDP ratio, which in the same article is expected to rise to 120% of GDP, putting it on a similar footing to Italy with 135% debt to GDP.
The pound has made gains against the Euro on these matters, as sterling is being seen in a better light because of the advancements in the UK’s economic response to the crisis. The extensive measures taken by the UK Government are all helping the pound to be seen more favourably, in that the UK is positioning itself well for a future recovery.
There is real potential for the pound to make further gains against the Euro, should there be little progress on a comprehensive and coordinated debt plan for the Eurozone. Key meetings today between Eurozone members this week failed to settle the issue, and the continued uncertainty here is triggering a point of weakness for the Euro.
Where next for GBPEUR levels?
It is the bank holiday weekend currently so there is little market movement, but that could mean now is the perfect time to be making some more specific plans. Next week is a series of Eurozone Inflation statistics, which could prove pivotal in shaping Euro movements.
The Euro is weaker on economic fears and any signs of change in the Inflation data might alter investor attitudes to the single currency. For the pound, we are quite light on data but it will be interesting to see if the recent optimism for the UK is misplaced or not.
If you would like to learn more about factors effecting GBP or EUR exchange rates for an upcoming currency transfer, please feel free to contact me directly using the form below.