In what has been another intense week for the UK the pound to euro exchange rate has remained in a fairly tight range. The GBPEUR interbank rates currently at 1.1454 at the time of writing.
Prime Minister Boris Johnson returned to his role after the birth of his son earlier this week to once again address the nation with the latest Coronavirus update. Deaths have continued to rise but Boris has claimed that the UK is now ‘past the peak’ and on the ‘downward slope.’ During the press conference he also claimed that the government would be setting out its road map next week as to how the UK can move slowly away from the current lockdown rules.
The likelihood is that schools in some form will look to reopen as well as how people could start to safely commute if they have to go to work. Research and development has also been given a boost with Oxford University working together with AstraZeneca in terms of finding a vaccine. This news appears to have helped keep the Pound strong against the Euro which is good news for anyone looking to send money to Europe during this time.
Issues in Italy to Impact the Euro’s Value
Turning the focus towards the continent, the pandemic could have far larger repercussions form Europe owing to the tensions between countries within the block as to who and how much they will pay individually.
Italy’s credit rating was downgraded earlier this week by Fitch with Italian government bonds downgraded to ‘BBB’ rating which is the lowest level in investment grading. This will mean that Italy will have a higher cost of borrowing incurred and with their debt currently standing at 156% this is a real concern. In the background a recovery fund have been agreed in principle but there remain a huge amount of uncertainty surrounding the size and the terms of the deal.
Meanwhile, over in Germany the confirmed cases of the virus rose once again with deaths hitting 193 vs 173 the day before. However, at the same time there have been at least 126,000 recoveries. This has allowed Germany to look at reopening various businesses in the near future including a number of public services which has been agreed by Merkel as well as a number of other federal state leaders.
Eurozone Economic Data to Be a Key Driver for Euro Rates Next Week
In terms of economic data all eyes will be focused on Monday’s Eurozone Manufacturing data due out early morning. This covers April and the difference with this data is that this will include the entire period of lockdown so will provide us with a more accurate result compared to the March when Europe was operating different timelines of the lockdown.
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