Pound to Euro Exchange Rate Tumbles as Brexit Uncertainties Rise
The Euro (EUR) is seeing stronger performance since last night, pushing the Pound Sterling to Euro (GBP/EUR) exchange rate lower. Investors have had little reason to buy the Pound (GBP), which is becoming more volatile as markets anticipate UK-EU Brexit negotiations.
Since opening this week at the level of 1.1945, GBP/EUR has continued the downside trend seen in the previous week.
GBP/EUR’s attempts to hold its ground were short-lived. The pair is tumbling lower today. At the time of writing, GBP/EUR is trending close to a fortnight low of 1.1814.
Concerns over the spread of the coronavirus Covid-19 continue to dominate market movements. With key Eurozone data due through tomorrow though, upcoming stats could also influence Pound to Euro exchange rate movement.
Pound (GBP) Exchange Rates Struggles for Ground as Brexit Negotiations Take Focus
The Pound is seeing relatively directionless trade and limp movement this week. Investors are hesitant to make big moves on the British currency as rivals are dominated by coronavirus jitters.
On top of this, Brexit uncertainties are returning ahead of next week’s anticipated negotiations. UK-EU negotiations which will last through the end of the year are set to finally begin next week.
The UK government continues to maintain a tough stance on Brexit. With no sign of a shift in tone, markets are seeing something of a reality check on the remaining possibility of a hard Brexit.
The Pound’s appeal is limited as a result. Britain’s domestic outlook hasn’t been optimistic enough to help the British currency either.
The government’s upcoming budget is no longer expected to see much of a boost in government spending. As a result, hopes for a domestic economic rebound have softened slightly.
Euro (EUR) Exchange Rates Benefit from Slump in Rival Currencies
The developing coronavirus outbreak has left major currencies increasingly volatile this week.
However, despite cases of the virus rising in Italy, the Euro has been one of the week’s stronger currencies. It has benefitted from losses in major rivals.
Most notably, the typically safe and steady US Dollar (USD) has become increasingly volatile this week. The US Dollar has been zig-zagging as investors speculate the possibility of the coronavirus seeing a US outbreak, and this is leaving the currency falling today.
As the Euro is the US Dollar’s biggest rival, the Euro is benefitting most from the US Dollar’s plummet.
The shared currency is also volatile on coronavirus jitters though, so its strength may be limited.
Pound to Euro (GBP/EUR) Exchange Rate Awaits Eurozone Data and Market Developments
The Euro’s movement is still mixed amid coronavirus uncertainty. However, the shared currency could find some more solid support if upcoming Eurozone data impresses investors.
Today’s Eurozone confidence stats could cause some movement today. Tomorrow’s German and French data will be even more influential though.
German unemployment and inflation results will be published tomorrow, as well as French growth and inflation stats.
These will be among the week’s most influential datasets and could influence hopes for a Eurozone economic recovery. If German unemployment or inflation stats fall short, hopes for an economic recovery will worsen and the Euro could lose some of this week’s strength.
The Pound is unlikely to steady at all tomorrow though. UK confidence stats are likely to be brushed over as investors increasingly anticipate next week’s UK-EU Brexit negotiations.
Coronavirus developments will remain a big focus too. If the Europe outbreak notably worsens, the Pound to Euro (GBP/EUR) exchange rate is more likely to recover some of this week’s losses.
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