The Sterling to Euro exchange today has eased off the gas slightly following the continued gains the currency pairing had been making since the middle of last month. With rates having been at 1.143 at the opening of trading today, the rate has moved almost a cent down to 1.136 following the undulating pattern experienced by the sudden and significant drops the markets globally have witnessed. As we have seen over the past 3 weeks, these troughs have occurred repeatedly so the pairing is still expected to continue on its path to 1.15.
Upcoming UK Economic Data that May Influence GBP Rates
There is a cluster of PMI data to be published today for both the UK and Europe which may play on the rates of exchange potentially giving added stimulus for further Sterling gains or a halt or even the opportunity for the Euro to regain some of the ground it has lost recently depending on the outcome of the data. The markets are predicting that UK Services PMI will drop to all-time low of 34.8, down again from an already slumped 35.7 previously. To give an idea of how severe that is, any reading below 50 is considering negative and thus, this reading is certainly one factor that will contribute to an increasingly bearish market. However, whilst the UK looks to be suffering on that front, it is doing considerably better than the Eurozone Service PMI figure which is expected to come in today at a shocking 28.2, down further than the previously revised figure of 28.4. Based on this category of economic data, whilst neither releases are positive, there are further reasons to suggest that the GBP/EUR rate will continue on its upward trend.
At of the back end of yesterday, it was announced that total Coronavirus cases had breached the 1 million mark with the most dramatic increases still coming out of the US and Europe. Global deaths had also surpassed the 50,000 level at the current 53k reading. As these developments continue, it is likely that volatility will continue as all economic systems appear to be heavily influenced by the lack of clarity and low risk appetite to invest funds.
In less gloomy news, all eyes have turned to the question of how much progress has been made to create a vaccine to prevent COVID-19. So far, 35 companies are moving through the testing stages and at least 4 are now doing animal testing to understand how effective it is to get a projected timeframe in place before the cure can be implemented globally. Further good news comes from the company Moderna which is looking at which is looking into progressing to human-testing shortly suggesting how close to a working cure scientists have got. Clearly, if it was ready for global use it would still be a while before it was distributed as further checks would need to take place but it has been one of the few elements of good news that need to be announced amongst the multitude of problems the virus is creating.
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