Pound Sterling Euro (GBP/EUR) Exchange Rate Muted as Traders Flock to USD
The Pound Sterling Euro (GBP/EUR) exchange rate remained flat, leaving the pairing trading at around €1.1339.
The pairing was left flat on Wednesday after traders began to return to the safety of the US Dollar (USD).
Yesterday saw a rise in risk appetite after an increase in optimism about the coronavirus pandemic. Coronavirus cases in Europe and New York appeared to slow.
According to Bank of Singapore currency analyst Moh Siong Sim:
‘It’s a two steps forward, one step back situation. Optimism has been driven by the sense that perhaps the virus is turning for the better. But markets are really concerned about the extent of the economic fallout which is just starting to show up in the numbers.’
Meanwhile, British Prime Minister Boris Johnson remained in intensive care for his persistent coronavirus symptoms.
Although, health minister Edward Argar said Johnson is ‘comfortable, he’s stable, he’s in good spirits’.
Euro (EUR) Flat as EU Ministers Fail to Agree on Coronavirus Strategy
Traders flocked to the safety of the US Dollar after Eurozone finance ministers failed to agree on a coronavirus strategy.
Reports revealed ministers had been in conference for 16 hours. No agreement on how to tackle the economic impact of the coronavirus pandemic was reached.
The ongoing divisions within the Eurozone on measures to boost the economy have dampened single currency sentiment.
The meeting saw France and the south up against Germany and the north, with the bloc’s largest economy opposed to joint debt.
Added to this, further reports suggested tensions between Italy and the Netherlands heightened over conditions attached to EU bailout funds.
As the bloc stares at a deep recession and widespread unemployment, a new call between ministers has been scheduled to Thursday.
Pound Euro Outlook: Will Divisions Within EU Remain?
Looking ahead to Thursday, the new meeting between Eurozone finance minister is going to be in focus. This could see the Euro (EUR) suffer losses against the Pound (GBP).
If divisions between ministers about how to tackle coronavirus remain unresolved and tensions within Europe increase, the single currency will slide.
Traders are also likely to continue to monitor the situation of British Prime Minister Boris Johnson. Any reports on his situation improving could offer GBP a temporary boost.
Meanwhile, a slew of weak British data could send Sterling lower. If February’s GDP disappoints while construction output plummets before Covid-19 hit the country, the Pound Euro (GBP/EUR) exchange rate will remain flat.