Pound GBP/EUR Exch Rate Under Pressure
Major UK data published this week has done little for the Pound Sterling to Euro (GBP/EUR) exchange rate. Eurozone data and news continue to support the Euro (EUR). Investors hope for developments in the EU Recovery Fund.
GBP/EUR immediately plummeted after opening this week at the level of 1.1175. Sterling weakness and Euro appeal made a double-threat. The pair lost all of the previous week’s gains in the forex exchange market.
The GBP/EUR recovery has been limited, having rebounded slightly from the mid-week fortnight low of 1.0978. On Friday, GBP/EUR has only been able to recover to around the level of 1.1021.
Some more notable UK data is due next week and market focus is turning to the EU for now. EU officials will be meeting over the EU Recovery Fund.
No Support for Pound (GBP) Exchange Rates
This week was a key week for UK data, with more solid information on how Britain is weathering the pandemic.
Most of the data was disappointing and lacking in the hopeful stats needed to boost Britain’s outlook.
The Pound started the week off tumbling in forex trading as domestic growth fell short of expectations. It has only been kept low as other stats failed to offer the British currency much support.
Britain’s coronavirus and Brexit outlooks continue to cast gloom over the currency. Their government’s mixed responses to various issues cause uncertainty.
The mixed messages from the UK authorities on return to work policy doesn’t make GBP prospects more appealing. Prime minister Boris Johnson said workers should come back to the office. Chief scientific adviser Sir Patrick Vallance in contrast suggested people should continue working from home.
The European Central Bank (ECB) holds its July policy decision. There were no shifts in monetary policy. Neither were there any surprises in the bank’s tone or outlook.
Overall, the Eurozone’s outlook remains comparatively positive. Eurozone data has been showing signs of improvement. Markets have been happy with the EU’s handling of the coronavirus pandemic.
The ECB did warn about the potential impact of a coronavirus ‘second wave. The bank was overall in wait and see mode.
Eurozone FX markets are eagerly awaiting progress on a potential EU Recovery Fund. The upcoming EU Summit this weekend is expected to show progress in negotiations towards the fund.
Meanwhile, Pound to Euro (GBP/EUR) Exchange Rate Awaits EU Summit Developments
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