Pound Sterling Euro (GBP/EUR) Exchange Rate Rose as UK Announces Further Quarantine Measures
The Pound Sterling Euro (GBP/EUR) exchange rate edged 0.2% higher on Friday morning. This left the pairing trading at around €1.1085.
The pairing edged higher this morning after Britain announced quarantine measures would be imposed on France from Saturday.
This came after France’s Prime Minister said the infection numbers were going ‘the wrong way’. Added to this, France warned that the country would take ‘reciprocal measures’.
According to Transport Secretary Grant Shapps, the reason for the measures was due to the rate of infection rising to exceeding 20 cases per 100,000.
Speaking to BBC Breakfast, he said:
‘We’ve worked so hard in this country to get our level of infections down, the last thing we want do is to have people returning and bringing the infection with them. It’s to protect everybody.’
Euro (EUR) Slides as Bloc Records Worst Fall in Employment on Record
The single currency slumped this morning after the latest data from the bloc showed its trade surplus with the rest of the world rose in June.
The Eurozone’s trade surplus rose to €21.2 billion as the drop in imports outpaced the bloc’s fall in exports due to the coronavirus.
Added to this, data showed the 19-country bloc traded much less amongst themselves.
EUR also remained under pressure after the latest employment data showed the bloc recorded its worst fall in employment on record.
The number of people employed in the Eurozone slumped by -2.8% in the second quarter, and by -2.6% in the EU.
Eurostat noted that these are ‘the sharpest declines observed since time series started in 1995.’
It was also confirmed that the Eurozone shrank by -12.1% in the second quarter compared to the first three months of 2020.
Sterling (GBP) Supported by Hopes of Brexit Trade Deal
The Pound received an upswing of support on Thursday thanks to hopes of a post-Brexit trade deal will be reached before the end of the transition period.
Ireland’s Prime Minister, Micheál Martin said he believes there is a ‘landing zone’ to reach a free trade agreement between the UK and EU.
Added to this, the country’s chief negotiator, David Frost said a deal can be reached by September. He said this ahead of the next round of negotiations with his EU counterpart, Michel Barnier due to begin next week.
On Twitter, Frost said:
‘As we keep saying, we are not looking for a special or unique agreement. We want a deal with, at its core, an FTA like those the EU has agreed with other friendly countries, like Canada.
‘The UK’s sovereignty, over our laws, our courts, or our fishing waters, is of course not up for discussion and we will not accept anything which compromises it – just as we aren’t looking for anything which threatens the integrity of the EU’s single market.’
Markets continued to shrug off the news that Britain’s economy was among the worst-performing nations between April and June.
Pound Euro Outlook: Brexit Talks in Focus Next Week
Looking ahead, the Pound (GBP) could make some gains against the Euro (EUR) next week as trade talks begin once again.
If markets are optimistic the next round of talks will see London and Brussels inch closer to reaching a trade agreement, Sterling will jump. This will send the Pound Euro (GBP/EUR) exchange rate higher during next week’s session.