The euro to pound exchange rate has remained in a fairly tight range this week, as well as against a number of other currencies.
The only slight blip on the pound’s performance since the start of May came on Wednesday when the latest UK Gross Domestic Product (GDP) figures came out. The expectation for the figures was for a fall of -1.6% to -2% and this caused the pound to lose some its recent gains vs both the euro and the US dollar.
Eurozone GDP data showed a fall t -3.8% which although was much lower than the UK this came in line with expectations and this helped to stabilise the single currency vs sterling.
As we go into next week we see the latest release of UK unemployment figures for March as well as Average Earnings data. This may not be that bad as the UK only began lockdown with a week to go in March so the figures may not show such huge falls. However, also out on Tuesday morning we see the latest release of April’s Claimant count figures which could cause a lot of movement for Sterling Euro exchange rates.
Huge Recession Coming for the UK This Year
On Wednesday the Chancellor Rishi Sunak warned that the UK will be facing a ‘significant recession’ in during the next few months as the GDP data came in out its lowest since the credit crunch back in 2008. We saw a big fall for the first quarter but this was exacerbated by the huge fall in March and bearing in mind the UK was not in full lockdown until the 23rd March this is a big concern for the economy.
Therefore, as we begin to see the data releases for April coming during this month this could set off some alarm bells. However, at the same time it is worth bearing in mind that the Eurozone as well as the US are all struggling with their economies so it is almost a case of which economy has performed the least worst during this period.