The week has started off on a fairly positive note for euro to pound exchange rates, seeing a gain against the vast majority of major currencies, with over 1% rises over the New Zealand dollar, Japanese yen and Swedish krone.
We saw a slight loss for EURUSD, and EURGBP remained fairly stable, but in general those with euro to exchange into another foreign currency would have been broadly happy with the euro’s performance.
There were a few positives to take away from the day, with France starting the first stages of the lockdown exit strategy, properties started to complete, people started to get back out to work and even horse racing was once again back on French televisions, all small signs that things might be getting back to normal and the economic cogs ever so slowly turning again, at least for the short term.
Over in Italy, one of the worst impacted regions for COVID-19 we saw a positive step in the right direction as Italy posted the lowest number of Coronavirus cases since March 4th, which is a large step in the right direction in the fight against the virus. The number of COVID-19 positive cases along with the number of deaths will be being watched extremely closely by investors and speculators and those regions that seem to be coping the best and starting to move forwards again may see their currencies reap the rewards, it does seem like the Eurozone has a long and difficult battle ahead, both with the virus and the economic hangover that may follow it but this was a green shoot of positivity during yesterday’s trading.
Eurozone Growth Figures on Friday Set to be Key
Friday morning we have the release of the latest growth figures from around the Eurozone, and overall for the Eurozone over the course of the morning’s trading. It seems at present that the market expectations are for poor economic performance around the globe, so even some of the worst sets of data we have seen over the past few weeks have not tended to impact exchange rates too badly, however we must bear in mind that a lot of the figures released lately only tell a small portion of the full picture.
Most figures have covered Q1 of 2020 which would be up until the end of March, we will likely start to see the real economic damage that has been done in each region when Q2 figures are released, and expectations are for some grim reading.
Take Spain and Greece for example, two economies that thrive on tourism and have both had serious economic troubles over the past 5 years, the lack of travel and the lack of ability to do business may well be enough to tip these economies over the edge, which could bring back some really difficult economic conundrums for the European Central Bank to untangle, especially with such a broad spectrum of economies under their control.
With this in mind it wouldn’t be a surprise to see fairly big problems ahead for the Eurozone and the euro, although its not like they haven’t managed to circumnavigate them before and almost come back with a strong euro than they started with, so watch this space.
European stocks have started a touch lower this morning, it will be interesting to see how the day progresses.
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