The Pound Euro (GBP/EUR) exchange rate firmed last week, as the appeal of the single currency was undermined by Europe’s coronavirus woes
What’s Been Happening: Pound Euro Rallies amid Europe’s Coronavirus Resurgence
The Euro struggled last week as it was beset by concerns over Europe’s coronavirus resurgence, as well as the EU’s struggle to accelerate its vaccine rollout.
The Euro found a temporary reprieve with the publication of the Eurozone’s latest PMI figures in the middle of the week, as they revealed growth in the bloc’s manufacturing sector reached a record high in March.
However, the single currency then stumbled again in the latter half of the week, as the lack of a clear solution to boost the EU’s vaccine rollout, as well as some infighting between EU leaders over new border restrictions, spooked EUR investors.
Meanwhile, the Pound faced some pressure at the start of last week, as a spat between the UK and EU over vaccine exports, stoked fears the UK’s vaccination programme could be disrupted.
Sterling then faced some volatility on the back of some mixed UK data, with stronger-than-expected employment and PMI releases being offset by a shock deceleration of domestic inflation last month.
However, the Pound rallied sharply towards the end of the week, as GBP rejoiced after the EU opted not to impose harsh restrictions on vaccine exports.
Three Things to Watch Out for This Week
- Coronavirus Developments
Coronavirus headlines are likely to remain a key source of volatility in the Pound Euro exchange rate this week, as cases in Europe continue to rise and threatens to spill over into the UK.
- Eurozone CPI
Also influencing the Euro this week will be the publication of the Eurozone’s latest CPI release, with an acceleration of inflation likely to bolster the single currency.
- UK GDP
The only notable GBP data release this week will be the publication of the UK’s final GDP figures for the last quarter of 2020, which barring any downwards revision could offer some support Sterling.
Pound Euro Forecast
The Pound Euro exchange rate may trade in a wide range this week as European coronavirus headlines remain in the spotlight.