Pound to Euro Exchange Rate Struggles to Advance after Eurogroup Progress
Updated 16:37 BST 07/04/2020:
Investors were hesitant to buy the Pound Sterling to Euro (GBP/EUR) exchange rate this afternoon. This was despite the market panic surrounding the Pound (GBP) softening slightly.
Reports said that UK Prime Minister Boris Johnson’s condition is stable, helping Sterling to steady.
However, GBP/EUR was unable to recover or advance much. GBP/EUR continued to trend lower near the level of 1.1327, pressured by a slightly sturdier Euro (EUR).
Officials in the Eurogroup are expected to agree to fiscal policy of over half a trillion Euros. While fissures remain over proposed ‘coronabonds’, the Euro outlook is a little more positive due to this news.
(Originally published 08:38 BST 07/04/2020)
Pound to Euro Exchange Rate Fails to Hold Advance Attempts despite Market Calm
Global markets have seen slightly calmer performance this week so far, but the Pound Sterling to Euro (GBP/EUR) exchange rate has been tumbling. Investors are selling the Pound (GBP) amid news that UK Prime Minister Boris Johnson has been taken into intensive care.
A rebounding Pound was able to push GBP/EUR over a cent and a half higher last week. Since opening this week at the level of 1.1357 though, GBP/EUR has seen more mixed movement.
GBP/EUR briefly edged higher yesterday, but at the end of the day slipped lower again. At the time of writing, GBP/EUR is struggling to make any notable gains and trends just below the week’s opening levels in the region of 1.1351.
Investors sold the Pound last night due to shock poliitcal developments. It was confirmed that UK Prime Minister Boris Johnson had been taken into intensive care due to coronavirus symptoms.
Pound (GBP) Exchange Rates Uneasy after Boris Johnson Taken to Intensive Care
The Pound saw mixed movement yesterday morning.
Investors sold the currency on reports that UK Prime Minister Boris Johnson had been admitted to hospital on fresh coronavirus symptoms. Sterling edged higher again following comments that Johnson was expected to return to work smoothly.
Yesterday evening though it was reported that Johnson’s symptoms had worsened and he was being taken into intensive care. Market panic left the Pound tumbling slightly in response to the news.
However, the Pound’s losses were ultimately limited. Investors were hesitant to sell the British currency too much as the broad number of uncertainties simply left moves unappealing. According to Stephen Gallo, Head of European FX Strategy at BMO Capital Markets:
‘It’s also far too early to know what the PM being incapacitated or not making it out of the hospital will mean for UK economic and Brexit policy 3 to 6 months out. When there are too many moving parts, as we saw with the entire Brexit process, sometimes the British Pound just simply does nothing’
Euro (EUR) Exchange Rate Outlook Anticipates Eurogroup Meeting
The Pound is struggling to recover against the Euro (EUR) for numerous reasons. While Sterling is being weighed by uncertainty over the health of UK Prime Minister Boris Johnson, investors are also hesitant to move on the Euro much.
Euro investors are eagerly anticipating a key Eurogroup meeting expected today. Markets are hoping that the EU will finally make solid progress in announcing a coordinated EU-wide response to the coronavirus pandemic.
According to Analysts at ING:
EUR bulls will hope EU members can offer a catalyst for a more extended rally. For now, the Dutch and German reluctance to Eurobonds seems to be a key obstacle, so it remains to be seen whether any alternative options will convince markets to eventually price out the risk of another European debt crisis.
As the Euro is relatively safe, it is not benefitting much from the market’s current movement into slightly riskier assets.
Pound to Euro (GBP/EUR) Exchange Rate Awaits Coronavirus Developments
Both the Pound and Euro are currency under pressure, as investors await potentially significant developments domestically.
For the Pound, markets are anxious over the status of UK Prime Minister Boris Johnson. If Johnson’s condition improves, the Pound is more likely to see stronger performance again.
Euro investors, on the other hand, are awaiting the Eurogroup meeting expected today. If EU nations are able to make any solid progress on EU-wide fiscal stimulus to combat the coronavirus, the Euro could see stronger support.
On the other hand though, if the EU sees no notable progress this could hit both the Euro as well as global risk-sentiment.
The Pound to Euro (GBP/EUR) exchange rate outlook has the potential to shift notably in the coming sessions on coronavirus developments.