GBP/EUR Exchange Rate Falls, Shadow Education Secretary Urges UK to ‘Improve Test-and-Trade System’ Before School Returns
The Pound to Euro (GBP/EUR) exchange rate dipped by -0.2% today, with the pairing currently trading around €1.10.
Sterling struggled today as concerns persist over the British Government’s plans to reopen schools next month.
The shadow Education Secretary, Kate Green, said that the Government ‘can’t walk away from its responsibilities’, adding: ‘Ministers must rapidly improve the test-and-trace system before pupils go back to class in September.’
Paul Whiteman, the general secretary of the NAHT school leaders’ union, commented:
‘The success of September’s return to school rests as much on what happens outside the school gates as within. The government needs to ensure that everyone knows what actions they should be taking to keep everyone safe – we’re all going to need to work together to be successful.’
As a result, GBP investors are becoming increasingly jittery as the nation continues to struggle to reopen and ease its lockdown measures. Last month saw Prime Minister Boris Johnson delay the scheduled easing of the Covid-19 lockdown on 1st August.
Meanwhile, researchers have warned of a second wave of the coronavirus if the Government fails to significantly boost its test-and trace systems. Consequently, this has dampened optimism in the UK’s economic outlook in the months ahead.
Euro (EUR) Rises as Hopes Grow for Eurozone’s Economic Recovery
The Euro (EUR) edged higher against a weaker Sterling today despite growing concerns for the Eurozone’s economy following last week’s subdued Eurozone growth figures.
However, the EUR/GBP exchange rate began to edge higher following yesterday’s stronger-than-expected Eurozone Manufacturing PMI for July. The figure rose from 51.1 to 51.8, buoying hopes for the bloc’s economic recovery.
Chris Williamson, Chief Business Economist at IHS Markit, commented on the report:
‘Eurozone factories reported a very positive start to the third quarter, with production growing at the fastest rate for over two years, fuelled by an encouraging surge in demand. Growth of new orders in fact outpaced production, hinting strongly that August should see further output gains.’
In other Eurozone economic news, today saw the release of the latest Eurozone Producer Price Index for June, which beat forecasts and rose from -0.6% to 0.7%. As a result, the single currency has benefited from an improving outlook for the bloc’s economy.
GBP/EUR Outlook: Could a Strong UK Services PMI Boost Sterling Tomorrow?
Euro (EUR) traders will be awaiting tomorrow’s release of the Eurozone’s Retail Sales figures for June. However, if these remain subdued then we could see the EUR/GBP exchange rate struggle.
Tomorrow will also see the release of the final Eurozone Markit PMI Composite figure for July. Any improvement would prove EUR-positive.
The GBP/EUR exchange rate could rise tomorrow if the final UK Services PMI for July rises. With the services sector being Britain’s largest sector, any improvement would prove GBP-positive.