GBP/EUR Exchange Rate: Pound Plummets from Three-Month High
The Pound Euro (GBP/EUR) exchange rate shed roughly two cents over the past week, with the pairing plummeting from a three-month high to strike its worst levels since late May.
Sterling remained well supported through much of the second half of last week, with a strong domestic inflation print and hawkish comments from a Bank of England (BoE) policymaker stoking speculation the BoE could start to taper its stimulus programme sooner-rather-than-later.
However, the Pound was unable to sustain these gains, with GBP/EUR plummeting at the start of this week amidst concern over the UK’s alarming rise in coronavirus cases.
Looking ahead, there may be a chance for the GBP/EUR exchange rate to mount a recovery later this week, if the UK’s latest PMI releases print positively.
GBP/USD Exchange Rate: Sterling Nosedives as Coronavirus Surge Overshadows Reopening
The GBP/USD exchange rate collapsed to a six-month low this week, amidst a sharp spike in UK coronavirus cases and warnings from health experts.
While the government went ahead with its plan to lift nearly all remaining restrictions in England on Monday, the so-called ‘freedom day’ was overshadowed by warnings that daily infections in the UK could soar to 200,000 by the end of summer.
This raised doubts over the sustainability of the reopening, with many GBP investors fearing that some restrictions will need to be reimposed in the coming months.
Going forward, it’s likely that GBP investors will continue to keep a close eye on UK coronavirus statistics, leaving the Pound vulnerable to additional losses if new cases continue to climb at an accelerated pace.
USD/GBP Exchange Rate: US Dollar Soars in Bearish Trade
The USD/GBP exchange rate has skyrocketed over the past week as skittish investors flock to the safe-haven ‘Greenback’.
With coronavirus cases on the rise in many parts of the world, there is renewed uncertainty surrounding the global economic outlook, which has severely soured market risk appetite in recent days.
This upside in the US Dollar has also been supported by the latest US data releases, with US initial jobless claims falling to a new post-pandemic low and a surprise expansion in retail sales growth last month.
The ongoing focus on the global coronavirus resurgence is likely to continue to lend support to the US Dollar over the coming week, with additional gains potentially stemming from a positive US durable goods print.
EUR/USD Exchange Rate: Euro Slumps ahead of ECB Rate Decision
The Euro US Dollar exchange rate has trended broadly lower over the past week, with the single currency struggling to hold its ground against a resurgence ‘Greenback’.
While the EUR/USD faced some headwinds in the second half of last week’s session, the pairing’s selloff has accelerated this week, in anticipation of the European Central Bank’s (ECB) latest interest rate decision.
EUR investors are bracing for a dovish policy statement this month, after ECB President Christine Lagarde hinted that the bank will alter its forward guidance to reflect the change to its inflation target, following its recent strategy review.
Also in focus for EUR investors later this week, will be the Eurozone’s latest PMI figures. Will a robust expansion in the bloc’s private sector this month help to offset any post-ECB blues?