Euro Continues to Slide Against the Pound

Euro Continues to Slide Against the Pound

After seeing the single currency hit a high off 0.95 against the pound just 10 days ago, it has slipped back to 0.8947, after the pound had a resurgent end to the last week, with early signs that could be set to continue for the first part of the day’s trading at least.

COVID-19 Latest

The global spread of covid-19 and how economies around the world will be affected and in return how each country reacts to combat the virus is all that currency markets are focused on. Though the euro remains higher against the pound than it was before the virus started to dictate the currencies movements. With the euro a funding currency for investors, made attractive by the low negative interest rate on offer, the single currency quickly became an appealing currency helping its value soar to the levels we saw at its peak on 19th March.

As we know the eurozone isn’t immune to the uncertainty caused by the virus, with Italy and Spain both recording some of the highest casualty rates around the world. With the case of Italy being in a recession in 2018 and hardly recovering in 2019, this couldn’t have come at a worse time for the Italian economy and Europe as a whole. Last week a flash survey was released and showed a major decline for the Eurozone, with both the Manufacturing and Services sector recording a drop to 31.4 for March, any number above 50 being a positive this was biggest drop since the survey started in 1998.

With the euro having its turn to come under some pressure, the pound has been better positioned to take advantage after seeing its biggest losses against the euro since the financial crisis in 2009. As the UK comes to terms with the lock down period we are now in with the government firm on insisting everyone stays in doors, while supporting businesses, out of work employees and now also those self employed for at least 12 months, there is more confidence that the UK is better equipped to handle the crisis and get the economy back on its feet as soon as some form reality resumes, when that will be is clearly an unknown. So expect many more twist and turns in the euro against pounds value over the coming weeks and months.

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