The Euro to Pound exchange rate weakened this morning, as the pair regains traction from today’s opening level of 0.8877.
EUR/GBP has been recovering and advancing slightly since the start of the European Session. At the time of writing on Monday morning, EUR/GBP is trending near the level of 0.8885.
Euro (EUR) Exchange Rates Muted on Back of ECB Speech
The Euro (EUR) was muted this morning as the ECB left monetary policy unchanged yet again during its first meeting of 2021, and disappointing Ifo confidence surveys took centre stage.
Furthermore, Germany’s Ifo Business Climate Index hit a six-month low as companies remain cautious about the current coronavirus restrictions in the country, doing little to support the Euro.
Clemens Fuest, President of the Ifo Institute commented on the Index saying:
‘Sentiment worsened across almost all retail segments, in some cases drastically. This month, in contrast to December, many indicators in wholesale also pointed downward.’
‘The business climate worsened in construction, too. Assessments of the current business situation were somewhat less positive. In addition, more companies were pessimistic about the coming months.’
However, the Euro is finding some slight relief as the Pound (GBP) struggles against its own coronavirus situation, as the Eurozone’s vaccination rollout remains on the back bench.
Pound (GBP) Exchange Rates Struggle as Lockdown Could Last Until Summer
Sterling suffered this morning after comments from Health Secretary Matt Hancock over the weekend continued to limit the currency.
Pound investors are becoming increasingly worried that lockdown restrictions may now last until the early summer.
UK markets remain cautious as Covid-19 infections are still high despite the lockdown, and new variants of the virus run rampant through the country adding significant pressure to the NHS.
GBP traders are also awaiting today’s speech from the Governor of the Bank of England (BoE), Andrew Bailey.
With any dovish comments about the British economy, the Pound can expect to struggle even more.
EUR/GBP Outlook: Coronavirus Remains in Focus
Pound investors will of course be keeping an eye on any further coronavirus developments in the coming days, with the Education Secretary Gavin Williamson expected to make a speech in Parliament later in the week, which could give an indication of when or if restrictions can be eased.
Pound traders will also be looking ahead to tomorrow’s release of November’s UK unemployment rate report.
If this confirms forecasts and shows a rise in unemployment levels across the UK, Sterling would suffer further.
Euro traders will be focusing on their own coronavirus developments throughout the week.
If infection rates continues to rise and further lockdowns are imposed, the Eurozone could struggle against the Pound and see any gains disappear.
