EUR/GBP Exchange Rate Sinks as UK Market Mood Improves as Coronavirus Deaths Continue to Plummet
The Euro Pound exchange rate fell today despite growing concerns over the UK’s defences against a third-wave of Covid-19. The pairing is currently fluctuating around £0.85.
Prime Minister Boris Johnson has insisted that lockdown easing is still on schedule but has warned the public to ‘proceed with caution’ as Covid-19 infections continue to rise throughout the European Union (EU).
Mr Johnson said:
‘What we don’t know is exactly how strong our fortifications now are, how robust our defences are against another wave.’
However, the Pound Euro exchange rate performed well today following the first big step in easing lockdown restrictions.
As of yesterday, groups of six people are now legally allowed to meet up in outdoor environments.
Meanwhile, UK Covid-19 cases are showing signs of flattening out while coronavirus-related deaths continue to fall.
Boris Johnson said:
‘I’m hopeful; I don’t see anything in the data right now that would cause us to deviate from the roadmap.’
Euro (EUR) Struggles Despite French Consumer Confidence Hitting a Three-Month High
The Euro (EUR) struggled today despite the release of the latest French Consumer Confidence gauge, which beat forecasts and rose to a three-month high.
The French statistics body, INSEE, commented on the data:
‘In March, the share of households considering that the standard of living in France will improve in the next twelve months has bounced back sharply. The corresponding balance has gained sixteen points but is still far from its long-term average.
‘Households’ fears about unemployment trend have decreased in March. The corresponding balance has lost eight points but stays well above its average.’
However, with the EU facing a third-wave of rising Covid-19 cases, EUR traders are becoming more cautious about the Eurozone’s economic outlook.
In Eurozone economic data, today will see the release of the German flash Harmonised Index of Consumer Prices for March.
Any signs of the Eurozone’s largest economy struggling because of the Covid-19 situation would drag down the EUR/GBP exchange rate.
Euro Pound Exchange Rate Forecast: Could Rising German Unemployment Weaken the Single Currency?
Pound (GBP) traders will be awaiting tomorrow’s release of the final reading of the UK’s GDP report for the fourth-quarter of 2020.
Any signs of improvement in the UK economy would boost the Pound Euro exchange rate.
Additionally, if UK Covid-19 infections and deaths continue to fall, then the GBP/EUR exchange rate will likely continue to head higher.
Tomorrow will see the release of Germany’s Unemployment Rate report for February. If this continues to rise, however, then the Euro Pound (EUR/GBP) exchange rate would suffer.