Pound to Euro Exchange Rate Plunges as Euro Recovers from Tuesday Spook
Yesterday saw the Euro (EUR) slumping as markets saw fresh panic over the spreading coronavirus, but the Pound Sterling to Euro (GBP/EUR) exchange rate has slumped again today. Investors returned to the Euro amid speculation that the risk of the virus is now priced in.
Sterling (GBP) is struggling to hold its ground amid Brexit uncertainty. could GBP/EUR be in for another week of losses?
GBP/EUR tumbled around a cent from 1.2046 to 1.1945 last week and continues to trend lower. This week so far, GBP/EUR has briefly attempted to hold its ground but is currently trending closely to a weekly low of 1.1895.
Brexit uncertainty is limiting the Pound’s appeal. However, coronavirus jitters are limiting the Euro. There may be more volatility in store for the Pound to Euro exchange rate over the coming weeks.
Pound (GBP) Exchange Rates Struggles for Direction amid Brexit and Rival Currency Volatility
The Pound is falling against the Euro today. This movement has been largely due to Euro gains than Pound weakness.
The Pound has been lacking in drive this week, seeing mixed movement against different currencies. Sterling has been falling against stronger currencies and gaining against weaker ones.
While last week’s UK data was generally better than expected, Brexit uncertainties have returned to focus. Investors are hesitant to move too much on the Pound ahead of UK-EU Brexit negotiations beginning next week.
Sterling has been tumbling on signs of tough stances from the UK and EU, and firming again on signs of optimism. This jittery movement in response to Brexit speculation has meant the currency is struggling to steady.
Euro (EUR) Exchange Rates Steady despite European Central Bank (ECB) Rate Cut Speculation
After yesterday’s slump, the Euro is rebounding today. The Euro’s gains are pushing GBP/EUR lower, despite a lack of considerable support for the shared currency.
Yesterday’s losses were due to concerns over the coronavirus spreading in Italy. However, amid speculation that the effects of the virus have been largely priced in and may not drive the Euro much lower, the shared currency rebounded today.
The Euro’s gains today may have been slightly supported by stronger than expected French consumer confidence.
Ongoing concerns about the coronavirus outbreak and its impact on European Central Bank (ECB) interest rate cut bets have yet to damage the Euro much.
According to Nouriel Roubeni, Professor of Economics, via the Financial Times:
‘Fiscal policy will react very slowly, or not at all, given political and other constraints. Central banks are running out of bullets: how much more negative can the European Central Bank, Bank of Japan and others go on interest rates?’
Pound to Euro (GBP/EUR) Exchange Rate Could be Driven More by Domestic News in Coming Sessions
The coronavirus is dominating headlines and currency market movement so far this week.
However, with key Eurozone data due for publication into the end of the week and UK-EU Brexit negotiations next week, GBP/EUR investors have plenty to await.
Pound movement will be driven by rivals. Any surprising developments on UK-EU relations ahead of next week’s negotiations could also be influential.
As for the Euro, tomorrow will see the publication of the Eurozone’s February consumer and business confidence results.
Various European Central Bank (ECB) officials will also hold speeches. Any notable comments from officials regarding the coronavirus could influence ECB bets and the Euro’s movement.
Friday’s data will be even more influential. German unemployment and inflation, as well as French growth and inflation, could cause shifts in Eurozone outlooks and the Euro if they surprise investors.
Of course the coronavirus remains a huge focus for markets across the globe. Any surprises in the outbreak will likely continue to influence the Pound to Euro (GBP/EUR) exchange rate.