GBP/EUR Exchange Rate Falls as Eurozone Begins Economic Recovery
The Pound to Euro (GBP/EUR) exchange rate held steady this morning, with the pairing currently trading around €1.147.
The Euro (EUR) rose against the Pound today after France outlined a plan to gently ease lockdown restrictions from the 11th May. Tuesday also saw Spain announce plans to reopen its economy.
Spanish Prime Minister Pedro Sánchez said that the goal is ‘to recover daily life without putting collective health at risk’.
Meanwhile, today will also see the EU Commission release its measures of consumer and business confidence for April, both of which are expected to register sharp declines.
In Eurozone economic news, today will see the release of Germany’s flash April CPI data which will provide a glimpse into the bloc’s inflation as a whole. However, with analysts expecting a big drop due in part to tumbling oil prices, we could see the Euro begin to fall.
Pound (GBP) Falls as UK Barclays Bank Suffers from Covid-19 Crisis
The Pound (GBP) fell against the single currency today following news that the UK bank Barclays had been severely hit by the cost of the coronavirus pandemic.
Barclays said that it was now setting aside £2.1 billion to cover the surge in bad debts, and said it was further anticipating businesses and customers would be struggling to repay their loans.
Jes Tanley, the CEO of Barclways, commented:
‘The impact of COVID-19 came late in what was until that point a good quarter. Statutory profit before tax was £0.9bn and profit before tax excluding credit impairment charges was £3.0bn. We have taken a £2.1bn credit impairment charge which reflects our initial estimates of the impact of the COVID-19 pandemic.’
Furthermore, GBP reacted negatively to news that Prime Minister Boris Johnson may not undertake PMQs, sparking fears that the PM may not be well enough.
Jack Blanchard, an analyst at Politico Europe, comments:
‘The silence out of No. 10 was deafening last night as rumours swirled that the PM was not feeling up to a 30-minute Q&A in the chamber, and that his deputy Dominic Raab will again be standing in at noon.’
As a result, the Pound (GBP) has suffered a blow from rising fears that the UK could face further political uncertainty.
GBP/EUR Forecast: Could Sterling Rise on Talks of Easing Lockdown Restrictions?
Euro (EUR) investors will be looking ahead to tomorrow’s release of the Eurozone’s flash GDP for the first quarter. If this confirms forecasts and plummets by -3.5% or more, then we could see the single currency shed some of its gains.
Tomorrow will also see the European Central Bank (ECB) announces its interest rate decision. However, the ECB is expected to hold the rate at 0%.
Nevertheless, if Europe’s central bank is notably downbeat in its statement, then we will see the EUR/GBP exchange rate plummet.
The GBP/EUR exchange rate will continue to be driven by the UK’s coronavirus developments. If Downing Street lightens its tone on the nation’s crisis, then we could see Sterling rise on hopes of easing lockdown restrictions.
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