Euro to Pound Exchange Rate Advances despite Mixed Euro Demand
Despite a lack of solid strength in the Euro (EUR), the Euro to Pound Sterling (EUR/GBP) exchange rate is advancing as the week draws to an end. The Bank of England’s (BoE) latest comments were ultimately not enough to help the Pound (GBP) recover.
Since opening this week at the level of 0.9002, EUR/USD has spent most of the week trending with an upside bias. While the pair’s gains have been limited, it has attempted to recover some of last week’s losses.
EUR/GBP briefly dipped again yesterday in response to the latest Bank of England news. However, on Friday EUR/GBP was trending above the level of 0.9030 again.
Overall, the pair is on track to gain around a third of a penny this week. Markets are now looking ahead to major data due next week, as well as potential coronavirus developments.
Euro (EUR) Exchange Rates Struggle amid Lack of Fresh Drive
The Euro continues to see a broadly appealing outlook. Compared to other major economies, the Eurozone has been perceived as handling the coronavirus pandemic fairly well.
This is why the Euro has been avoiding losses this week. Generally, the shared currency continues to benefit from weakness in rivals like the Pound.
However, the Euro’s lack of fresh support and drive is limiting its potential for gains. The Euro to Pound exchange rate is struggling to sustain more than a modest recovery this week, as there simply isn’t much fresh impetus in Euro trade.
Some factors have been weighing on the Euro’s appeal as well. Concerns that there could be new lockdowns in Spain, which is seeing a fresh surge in coronavirus cases, is limiting Euro demand.
Pound (GBP) Exchange Rates Lose Shine amid Bank of England (BoE) and Trade Uncertainties
Yesterday, investors bought the Pound higher in reaction to the latest Bank of England (BoE) policy decision. The bank said that Britain had been weathering the coronavirus pandemic better than it had forecast in May.
However, this boost to the Pound was short-lived. By the end of Thursday’s session, Sterling was sliding again.
Various factors caused this weakness. Investors were hesitant to buy the Pound too much amid speculation that the Bank of England (BoE) could introduced negative interest rates at some point in the future.
On top of this, the Pound has once again been reacting to market risk-sentiment today. Amid worsening US-China trade tensions, the relatively risky Pound is even less appealing.
Euro to Pound (EUR/GBP) Exchange Rate Growth and Job Market Reports in Focus
While the Bank of England’s (BoE) August policy decision took focus in recent sessions, Euro to Pound exchange rate investors are likely to focus in key economic data due over the coming week.
The BoE continues to express concern over the health of Britain’s economy. In particular, there is concern that the unwinding of Britain’s furlough scheme will lead to skyrocketing unemployment in the coming months.
As a result, Britain’s next job market report, due Tuesday, could be one of next week’s most influential datasets.
There are many notable stats due throughout the week though. This includes Gross Domestic Product (GDP) growth data from both the Eurozone and UK.
If the Eurozone’s economic performance is better than expected or the Eurozone’s coronavirus situation calms again, the Euro is more likely to keep seeing resilient strength.
On the other hand, fresh lockdown in the Eurozone or stronger than expected UK data could pressure the Euro to Pound (EUR/GBP) exchange rate lower again.