GBP/EUR drops to six-week lows

  • GBP/EUR drops to six-week lows, coronavirus crisis still driving movement 

     

    The economic impact of the coronavirus pandemic has been the main driver behind currency movement over the past few weeks. 

    Last week saw the release of the UK’s latest flash GDP figure, which fell by -5.8%, while Germany – the Eurozone’s largest economy – entered a technical recession. 

    The pound fell to a six-week low of €1.11 against the euro, while the GBP/USD exchange rate fluctuated between highs of $1.21 and lows of $1.20.

    Meanwhile, EUR/GBP rose to highs of £0.89 as Eurozone economies continued reopening, with France and Germany easing lockdown restrictions. EUR/USD is currently trading in the region of $1.08.

     

    Latest currency news

    Staying up to date with the latest currency news can help you time your transfers effectively, so find out what you should be looking out for in the month ahead…

     

    What’s been happening?

    Brexit returned to the spotlight last week after the UK and the EU concluded their latest round of Brexit trade talks. Sterling stumbled after David Frost, Britain’s chief Brexit negotiator, said that the two sides had made ‘very little’ progress. 

    Last Wednesday also saw a slew of dire UK economic data, with UK growth falling in the flash estimate for the first quarter. Many analysts believe that the second-quarter will be far worse. 

    Meanwhile, the euro struggled after Germany’s first-quarter GDP posted its sharpest contraction since the 2008 financial crisis. 

    However, the euro ultimately came out on top as Germany and France moved to reopen their economies.  

    Finally, while the US dollar initially benefited from rising US-China trade tensions last week (after US President Donald Trump criticised Beijing’s handling of the coronavirus) poor US retail sales data and rising risk appetite saw USD slide before the weekend. 

     

    What do you need to look out for?

    Tuesday will see the release of the UK’s ILO Unemployment Rate report for March. 

    The unemployment rate is expected to rise from 4% to 4.4%, a result which could keep the pound on the back foot. 

    Bank of England (BoE) Chief Economist Andy Haldane said that we could see a return to ‘80s levels of unemployment’. 

    US-China trade developments will continue to drive the US dollar this week. Any signs of deteriorating relations between the two superpowers could prove USD-positive.  

    EUR investors will be focusing on the Eurozone’s latest PMI reports and will be looking for indications that output is starting to recover now that economies in the currency bloc are reopening. 

     

    At Currencies Direct we’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.

    Since 1996 we’ve helped more than 325,000 customers with their currency transfers, just pop into your local Currencies Direct branch or give us a call to find out more.

    Call +34647569563
    Or
    Email inara.g@currenciesdirect.com

Comments

0 comments