GBP/EUR Exchange Rate Stable amidst Improving Market Mood
The Pound to Euro (GBP/EUR) exchange rate is holding steady this morning as upbeat market sentiment helps to shore up Sterling.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1085, virtually unchanged from this morning’s opening levels.
Pound (GBP) Remains Supported by Market Optimism
The Pound (GBP) is clinging to its recent gains against the Euro (EUR) this morning, as Sterling sentiment continues to be supported by an improving market mood.
Positive news regarding a potential coronavirus vaccine is helping bolster market optimism, which in turn is helping to buoy the increasingly risk sensitive Pound.
US pharmaceutical giant Pfizer has reported encouraging initial results from the first human trials for its coronavirus vaccine.
JUST IN: Pfizer and BioNTech see early positive results for their coronavirus vaccine. https://t.co/F7ojfLYHLY pic.twitter.com/QwSJT1Ew4u
— CNBC (@CNBC) July 1, 2020
Philip Dormitzer, the chief scientific officer for viral vaccines at Pfizer’s research laboratories, said in an interview with ABC News:
‘Our first vaccine candidate is eliciting antibody levels to neutralize the virus that is equivalent to or better than what you see in people who have had COVID-19.”
‘It’s been a tremendous amount of work and there’s now a lot of pride to see the results start to come forward. The potential is there to actually change a lot of people’s lives.’
The upbeat news has helped the Pound to shrug off concerns regarding the UK’s own coronavirus woes, as the government warns its ‘won’t hesitate to act’ amidst rising infection rates in parts of the north-west, suggesting we may see more local lockdowns introduced in the coming weeks.
Euro (EUR) Steady as Unemployment Beats Expectations
At the same time, the Euro (EUR) is holding its ground this morning in the wake of better-than-expected unemployment figures from the Eurozone.
According to data published by the European statistics agency, Eurostat, unemployment in the Eurozone ticked up from 7.3% to 7.4% in May, beating expectations that the economic fallout of the coronavirus crisis would have pushed it as high as 7.7%.
The release was welcomed by EUR investors, who took it as another sign that the Eurozone economy will be well positioned to mount a recovery through the second half of 2020.
GBP/EUR Exchange Rate Forecast: Brexit Developments to Drive Sterling
Looking ahead, any further upside in the Pound to Euro (GBP/EUR) exchange rate looks to be capped as the focus turns back to Brexit.
The UK and EU are expected to update markets on the progress towards a trade deal when they conclude the latest round of talks later in the week.
Despite both sides going into a month of ‘intensified’ talks with renewed vigor, analysts are pessimistic on the chances of a breakthrough this week, likely applying pressure to Sterling.
Meanwhile, the focus for EUR investors looks to be on the final release of the Eurozone’s latest PMI figures, with the Euro potentially being given a leg up if activity in the service sector in June is revised higher.