Pound Euro Exchange Rate Gives Up Weekly Gains on Friday
After spending the second half of the week trending higher, the Pound Sterling to Euro (GBP/EUR) exchange rate has been tumbling again since yesterday. As UK data fails to impress investors this morning, the Pound is being sold on lasting coronavirus jitters.
Since opening this week at the level of 1.1250, GBP/EUR has seen mixed movement. GBP/EUR was weak in the first half of the week but attempted a mid-week surge.
Yesterday, GBP/EUR touched on a new 4-month-best of 1.1322. Since then though, the pair has been falling back and at the time of writing is trending below the week’s opening levels in the region of 1.1235.
Pound (GBP) Exchange Rates Falling Back as UK Data Fails to Impress Markets
However, this hope that Britain’s economy could rebound strongly from the coronavirus pandemic fizzled out a little on Friday, as key UK retail sales stats disappointed markets.
In December, UK retail sales slowed to just 0.3%, and the previous figure was revised much lower to –4.1%. The yearly figure fell far short of expectations, coming in at just 2.9% rather than 4.0%.
This worsened concerns that Britain’s economy could contract. What’s more, speculation that the UK could see yet another coronavirus lockdown over the summer further weighed on the Pound.
Euro (EUR) Exchange Rates Driven by Rival Currencies as Eurozone Outlook Unsurprising
The Euro (EUR) continues to be driven largely by movement in rival currencies like the Pound and US Dollar (USD). As the Pound is weakening today, this is making it easier for the Euro to advance.
The Eurozone’s own outlook hasn’t changed much in the last few sessions. Yesterday’s European Central Bank (ECB) policy decision saw the bank take an unsurprising stance with no notable shifts in tone.
Then, today’s Eurozone PMI projections were also generally unsurprising, coming in fairly close to estimates in most major prints.
German manufacturing fell short but still printed big growth, while German services were better than expected. The Eurozone’s overall composite PMI came in at a slightly weaker than expected 47.5.
Pound Euro (GBP/EUR) Exchange Rates Outlook Could be Weighed by Coronavirus Fears
The Pound to Euro exchange rate may struggle to mount another advance unless there is a more solid improvement in Britain’s outlook.
As UK data indicates Britain’s economy will struggle in coronavirus lockdown, the Pound may not see much relief unless there is some improvement in the domestic coronavirus situation.
If there are signs that the coronavirus lockdown is having effect, the Pound is more likely to strengthen. More strong UK data could also boost hopes of Britain’s resilience.
Tuesday will see the publication of Britain’s November job market report and December jobless claims. These could be some of next week’s most influential stats.
As for the Euro, it will continue to be driven by movement in rivals. The Eurozone outlook could also be influenced by French and German growth stats due next Friday.
As political uncertainty continues to calm, coronavirus developments and data will remain influential for the Pound Euro (GBP/EUR) exchange rate.