The Pound Euro (GBP/EUR) exchange rate has been steadily rising since markets opened this morning as investors patiently await the latest interest rate decision from the European Central Bank later on this afternoon.
The GBP/EUR pairing are trending around the 1.1657 level at the time of writing as the so-called ‘pingdemic’ continues to affect the UK.
Pound (GBP) Steadily Rises Despite Ongoing Coronavirus Cases
The Pound has been strengthening against the Euro for much of the morning as EUR exchange rates await the ECB interest rate decision.
Whilst Sterling has been supported against many of its counterparts, concerns remain over the ongoing ‘pingdemic’ in the UK.
Businesses are calling on the UK government to provide clarity on self-isolating through the NHS track and trace app as supply chains begin to buckle.
Richard Walker, managing director of Iceland spoke to UK television this morning to discuss ongoing issues:
‘Issues around supply chain have been building for quite some time. We have a structural issue with HGV drivers for a variety of different reasons. The pingdemic has made it even worse. The double pronged problem is that our store workers are now getting pinged as well.’
‘We have over 1,000 who have been pinged and are having to self-isolate at home. The result of these two issues combined means that we are starting to see some availability issues and it is increasingly very challenging to keep our shops open, to keep lorries travelling to our shops, to keep food on our shelves and to keep staff in our shops to serve the customers.’
Euro (EUR) Dips Ahead of ECB Interest Rate Decision
The Euro has dipped against many of the majors this morning as investors await the latest interest rate decision from the ECB later in the day.
Whilst the bank is expected to keep interest rates at a record-low of 0%, markets will look to see if the bank change its stance on monetary policy following the recent strategic overhaul from the ECB a couple of weeks ago.
Elga Bartsch, head of economic and markets research at BlackRock Investment Institute commented on what we can expect from the bank, saying:
‘The ECB has materially reduced the chances of premature tightening. It is now, when the new strategic framework is implemented, that we could get dovish surprises.’
Pound Euro Exchange Rate Outlook: UK Retail Sales in Focus
Pound investors will be looking towards the release of the latest UK retail sales figures for June, which if meet forecasts 0.4% could propel Sterling higher heading into the weekend.
More so, both Pound and Euro traders will be keeping an eye on flash PMI figures from the UK and Eurozone.
Whilst the figures are preliminary they are expected to give a broad overview into how the respective economies have been performing.
The Pound Euro exchange rate will continue to be driven by any further coronavirus developments in the coming days.