GBP/EUR Exchange Rate Pushes 22-Month High
The Pound Euro (GBP/EUR) exchange rate is trading higher during today’s session in response to mounting concern surrounding coronavirus case numbers throughout the UK and Europe.
At the time of writing, the GBP/EUR exchange rate is pushing a 22-month high and trading at around €1.1913 with a market movement of 0.3%.
Euro (EUR) Slips as EU Countries Report High Levels of Coronavirus
The Euro (EUR) is falling against the Pound during today’s session in response to high levels of Covid-19 cases.
Many European countries have witnessed a significant increase in coronavirus case numbers this week which is weighing on EUR.
On Monday, the French health minister warned that current data suggests that the ‘most difficult weeks are yet to come’ with January expected to reach 250,000 cases per day as daily cases have already hit 200,000.
In a bid to prevent the spread of coronavirus, the French government has reinstated restrictions such as working from home three times a week.
Elsewhere, Italy has reached 78,000 infections, the country’s highest level since the pandemic began. Despite this, the country has not imposed restrictions on private gatherings, though has closed nightclubs and official outdoor events.
On the other hand, Spain has reduced the time of quarantine from 10 days to 7, despite high levels of infection, due to staff shortages which has negatively impacted the economy.
Dr Michael Ryan, executive director of the World Health Organisation’s (WHO) Health Emergencies Programme, has said that it’s not ‘advisable’ to reduce restrictions at present and is urging governments to be ‘careful.’
EUR is being further pressurised by a stronger US Dollar because of the negative correlation in the pairing.
An absence of data scheduled to be released throughout the rest of this week’s session leaves the single currency vulnerable to market sentiment as well as coronavirus advancements.
Pound (GBP) Gains In Spite of Coronavirus Uncertainty
Meanwhile, the Pound (GBP) is being bolstered by the Euro’s weakness during today’s session as the UK also struggles with rising coronavirus case numbers.
On Wednesday, the UK’s daily cases had reached a record high of 183,037 which was the first publication of new figures since Christmas Eve and shows a steep incline in case numbers.
Scotland’s first minister, Nicola Sturgeon, said:
‘It is reasonable to assume that we will continue to see steep increases in cases in the days and indeed possibly in the weeks ahead.’
The World Health Organisation (WHO) has deemed the two prominent variants, Omicron and Delta, as a ‘twin threat.’
This is capping Sterling’s potential against the single currency as case numbers rise significantly over the festive period, increasing the likelihood of the UK government imposing additional restrictions in the new year.
With a lack of data scheduled to be released during the remainder of this this week’s session, GBP is also susceptible to risk appetite and coronavirus developments.