EUR/GBP Exchange Rate Rangebound as Europe’s Covid-19 Cases Remain High
The Euro Pound exchange rate held steady today as Europe cautiously begins lifting Covid-19 restrictions. The pairing is currently fluctuating around €0.86.
The Euro (EUR) failed to rise against the Pound today as numbers of coronavirus infections in Europe remain high.
Nino Cartabellotta, head of the GIMBE Foundation health think tank has however warned about Italy’s easing of restrictions, saying:
‘Clearly if the gradual reopening is interpreted as a ‘free-for-all’, a new surge in infections risks compromising the summer season.’
However, Italy’s restaurants, bars and cinemas have partially reopened as the nation prepares for a debate around a major coronavirus recovery bill.
The nation’s economy fell by a staggering 8.9% last year, leaving many EUR investors cautious about the outlook for the Eurozone economy.
Pound (GBP) Exchange Rate Steady Despite Growing Confidence in UK Economy
The Pound (GBP) failed to rise against the single currency today despite growing confidence in the UK economy. HSBC reported a surge in quarterly profits because of an improved outlook for the nation’s economy.
HSBC’s Chief Executive Noel Quinn commented:
‘We are more optimistic than we were back in February, we expect GDP to rebound in every economy in which we operate this year.’
A surge in consumer spending is also expected to help Britain’s economy rebound this year.
Experts at Deloitte said they expect the UK to be set-up for a ‘sharp snap back’ in spending as Covid-19 restrictions ease further in May.
Ian Stewart, chief economist at Deloitte, commented:
‘High levels of saving, the successful vaccination rollout and the easing of the lockdown set the stage for a surge in spending over the coming months.’
Euro Pound (EUR/GBP) Exchange Rate Forecast: Could a Dovish ECB Drag Down the Single Currency?
Euro (EUR) investors will be awaiting tomorrow’s speech from the European Central Bank’s (ECB) President Christine Lagarde.
Any dovishness about the outlook for the Eurozone’s economy, however, would weaken the EUR/GBP exchange rate.
Tomorrow will also see the publication of the latest German GfK Consumer Confidence Survey for May.
If this shows a downturn of consumer morale in the Eurozone’s largest economy, then the Euro would suffer.
The Euro Pound (EUR/GBP) exchange rate could suffer this week if the outlook for the UK economy continues to improve.