It could prove to be a particularly interesting second half of the week for euro exchange rates with the markets taking note of the $545 bn relief program proposed by European heavyweights France and Germany to help support economic activity through the crisis. Though the program is yet to be approved by the EU’s other members, the drive marks the first time France and Germany have openly committed to mutual terms and as such could prove to be a market driver in the weeks and months ahead. It has certainly helped the single currency protect it’s early week gains, hitting a week high against the dollar and a mammoth 50 day high against the pound.
This morning’s key inflation data, Eurostat’s Consumer price index, is expected to come in as low as 0.3% for the month of April. Given the amount of pressure the European central bank has been under to justify it’s monetary stimulus program the release might help the ECB push their strategy further to help the bloc find it’s feet during the ongoing crisis.
The CPI release could act as a precursor to this afternoon’s consumer confidence release provided by the European commission. The index is often used by investors to gauge growth within the eurozone. A contraction of -27 is expected here, it will be interesting to see if this morning’s releases filter through in which case added volatility on euro exchange rates could be expected. It is worth remembering that new car sales fell by over 75% across the bloc throughout the month of April.
Markit PMI figures from the eurozone’s major layers France and Germany could set the tone for EUR exchange rates as the week comes to an end. Business confidence cross the bloc had hit record lows in the subsequent release from last month and so investors will be holding out for an improved outlook before committing to the EUR further. If you are looking to purchase foreign currency with euros in the short term you can register you interest on the link below.
Euro to Pound exchange rates: Best levels to buy Pounds with Euros in over 50 days
GBP EUR exchange rates have struggled to rebound back past the 1.12 mark having hit the low 1.11s at the start of the week. The fall in the pounds value potentially marks a clear lack of support for the pound after the Bank of England hinted towards further monetary stimulus.
To add to this, Michel Barnier’s comments over the weekend could be stalling the pounds value too. By confirming the lack of progress of trade talks between the UK and the EU, Barnier has further clouded the outlook for the UK economy which could have a negative effect on investor appetite in the weeks and months ahead.
Just yesterday, the planned levies produced by trade secretary Liz Truss highlighted a potential jump to 10% duties on meats, cars and butter should an agreement not be found by the end of the year. It will be interesting to see how the EU counter this as both sides continue to posture as we move closer to the second half of the year.
Improvements in tomorrow’s Markit manufacturing and services PMI release could help the pound reverse the trend however. The release tracks business confidence within both sectors and so is often used by investors as a gauge for future economic growth. As a result, clients looking to buy pounds with euros may wish to capitalise on current levels.
EUR to USD: Will the pairing hit 1.10 once more?
The Euro certainly started the week on the front foot against the dollar to having accelerated back up to the mid 1.09s, a week high for the pairing. The question is whether or not the single currency can hold it’s ground and maybe push for pivotal 1.10 mark.
The fact the euro has already hit these levels 3 times this month before retreating potentially reflects a lack of support from the markets. It will be interesting to see if tomorrow afternoon’s key employment data helps set a new trend for the pairing. Jobless claims are expected to rise once again as businesses continue to adjust to the challenges COVID 19 is imposing on the markets. However a heavy rise could potentially raise extra question marks around the US economy which could support the euro’s rise further. If you are looking to buy dollars and would like to plan a transfer around tomorrow’s release you can get in touch using the form below, we’ll contact you to discuss your enquiry and how these factors are likely to impact your exchange.