Pound to Euro Exchange Rate Edges Higher
The pound to euro exchange rate gained on forex this morning, with the pairing currently trading around €1.143.
The euro has continued to slide today after Eurozone factories suffered a breath-taking crash with manufacturing output plunging to record lows in April.
Manfred Huebner, Sentix Managing Director, said the economy in the Eurozone has experienced a breath-taking Sentixcrash in recent weeks. The collapse goes far beyond the distortions caused by the financial crisis, he added.
The Sentix Eurozone Investor Sentiment Index plunged to -41.8 in May, falling below expectations of -33.5. Consequently, this weighed market confidence in the single currency as the bloc’s economic outlook continues to darken.
Meanwhile, the European Central Bank governing council member, Jens Weidmann, said that Germany had entered a severe economic recession.
He also added that an economic recovery could be sustainable once the coronavirus pandemic ends.
Euro investors will await the German constitutional court’s ruling on the legality of the ECB’s Public Sector Purchase Programme today. If the ruling is granted, the ECB’s Pandemic Emergency Purchase Programme would commit a further €750bn purchase this year alone.
Pound Gains as UK Trials Covid-19 Tracing App
The pound gained in the FX market today as the Isle of Wight begins trial of its coronavirus contact-tracing app. As a result, traders of the Sterling have become more optimistic over the UK’s progress with the virus crisis.
Health Secretary Matt Hancock has also been discussing ways of getting employers back to work.
He said it’s critical that employers offer safe workplaces. They’ve been working with employers, large and small, and trade unions on getting these details right.
There are further discussions going on this week. So that as and when more people can get back to work there are guidelines and rules in place. This is to make sure that they can have safe distancing in the workplace.
Meanwhile, the UK Government released Sage pandemic advice papers. It showed that the scientific advisory group wanted lockdown measures to be lifted very gradually.
UK economic news reported the release of the Market Services PMI for April. The figure rose to 13.4 despite forecasts of a 12.2 decrease.
In forex news, euro investors will be awaiting tomorrow’s release of the European Commission’s Economic Growth Forecast report. If, as is expected, this is notably gloomy, then we could see the euro continue to sink.
Tomorrow will be the release of the final Eurozone Markit PMI Composite figure for April. However, with the bloc’s economic outlook expected to darken, this is unlikely to provide much uplift for the single currency.
The developments of the pandemic this week will drive the pound to euro exchange rate. However, if Downing Street announces lockdown easing measures, the pound sterling could rise on hopes for the British economy’s recovery.
