The pound to Euro exchange rate has fallen sharply lower after a week of what has been a week of more narrow trading. Rates for GBP vs EUR are sitting at 1.1340 having fallen below 1.13 yesterday as coronavirus uncertainty continues to unsettle the currency markets.
When Could Economies Recover From Coronavirus Crisis?
There is much uncertainty at present as to how quickly the British and European economies can recover from this pandemic. It is still not known how quickly economies can bounce back when the Covid-19 situation passes. Spain has indicated it will wind down its lock down measures in the second half of May. It has been reported that Spain will allow children under 14 to leave their homes from 26th April. Italy are expected to ease their lockdown from 4th May. In the UK human tests are expected to begin on two Covid-19 vaccines.
PM Boris Johnson Speaks to President Trump Regarding Future Trade Deal
UK Prime Minister Boris Johnson spoke with US President Donald Trump yesterday and it in the statement given it mentioned a future trade deal between Britain and the US. Brexit will inevitably become a major point of discussion as Britain is currently set to end the transition period at the end of 2020. Any developments on Brexit will likely see substantial market reaction for the GBP to EUR pair.
Factors That Could Affect Pound to Euro Rates
Data is light this morning for the European Union other than consumer confidence numbers for April which are expected to drop dramatically. Expectation is that they will fall to their lowest on record since 2013. This morning sees UK Consumer Price Index inflation numbers which whilst are important are likely to be overshadowed by ongoing Covid-19 developments.
Tomorrow sees UK Purchasing Managers Index data for the manufacturing and services sector which could give some good indication as to how badly businesses in these sectors have been hit by coronavirus. Those looking to buy or sell Euros would be wise to plan around these important releases and there could be high volatility on the back of the them.
The European Council will also meet tomorrow and any developments on how to fund and rebuild economies within the EU that have been hit hardest by Covid-19 could see marker reaction here.
If you’d like to discuss these factors and how they could impact an upcoming currency transfer, feel free to get in touch with me, James Lovick, using the form below.