The Pound Maintains Support Against the Euro Above 1.14

GBPEUR Giving Up Inflation Gains Before Jobs Data

This morning the GBPEUR interbank exchange rate was trading at 1.1478 at the time of writing. The pound has held its position in the 1.14 range against the euro, however an increase in positive sentiment could help push the pound above 1.15 again.

Boris Johnson, the UK Prime Minister resumed work yesterday. While the UK has possibly seen the worst of COVID-19, Boris Johnson reiterated yesterday that the UK must continue to abide by lockdown measures to avoid the virus flaring up again. The 7th of May is the first potential date we might see further signs if there are going to be any easing of the restrictions, as we have seen in several European countries. He did however say that details of how some restrictions will be lifted may be revealed later this week. Spain and Italy have indicated that the first phase of opening parts of their economies will start on the 2nd and 4th of May respectively, while France is looking towards the 11th of May to begin easing their lockdown.

UK Business Confidence Down

This morning saw the release of the Lloyds Bank business barometer for April, which showed a large decline in business confidence. Sentiment fell in all areas and sectors of the UK with indications that 20% of firms are running at zero capacity, and 64% of firms are operating more than 50% below capacity.
This morning, France’s consumer confidence for April was released and came in better than expected at 95 versus the forecast of 83, with a previous reading of 103. The unemployment rate for the first quarter of 2020 in Spain also came in better than expected at 14.41% against a forecast of 15.6%.

Market looking ahead to Thursday’s ECB meeting

Today in the UK, the Confederation of British Industry will release the distributive trades survey for April at 11:00 UK time which is forecast to come in at -40 versus a previous reading of -3. Irish Retail Sales, month on month for March are also released at 11:00 UK time and forecast to be lower that the previous reading of -4.3%. Otherwise, the market is light with economic data today and tomorrow, and the market will be mainly looking forward to the European Central Bank’s meeting on Thursday to see if there are any changes announced to its quantitative easing programs.

As we are seeing more European countries easing their lockdown measures ahead of the UK, this could help strengthen the euro in which case might push the GBPEUR forecast lower. Get in touch to discuss these factors and the potential impact on GBPEUR exchange rates by using the form below. I’ll be happy to get in touch personally and discuss your requirements.