Euro to Pound: France Reopens Borders as COVID-19 Cases Fall

Euro to Pound: France Reopens Borders as COVID-19 Cases Fall

More positive news comes from the Eurozone this week as France has today reopened its borders to the rest of Europe and will allow non-EU nations to visit in the coming weeks starting on July 1st. Europe has gradually been uncoiling itself of late with more countries continuing to open as the previous concerns of border re-openings causing a second wave of the pandemic seem not to have come to light. The increasingly positive news has had some pleasing results for clients holding euros as it has consistently been making strong inroads against many of its major currency counterparts. For instance, the euro to pound mid-market exchange rate has been gaining for the past 6 weeks, with rates moving from 0.88 to 0.91 at its height in recent days. Albeit there has been a lot of volatility in between, there is increasing confidence in the single currency to continue to grow. This also comes after the UK released its Gross Domestic Product (GDP) data Q1 results which came in at a 20% contraction, or in more understanding terms, the worst fall in economic strength since the Great Depression in the 1930’s. Whilst all EU countries are expecting to decline, none have predictions as significant as this suggesting the potential for further currency inroads if there is further economic data to support these announcements. For the EUR to USD, progress has been weakened somewhat as the last few days has lost some of the 5 cent gains it had made since the end of May with current standings at 1.125 having lost 1.2 cents since last week.

Tuesday Set to be This Week’s Volatile Day

The Eurozone is not expecting any volatility-causing data sets this week other than on Tuesday with the arrival of the German Harmonized Consumer Price Index giving insights into the changing costs of living. The previous result came in at 0.5 and current predictions are expected to remain unchanged but should numbers come in away from these predictions there could be some movement for the euro. This will then be bolstered by the German ZEW economic sentiment survey later on tomorrow which will shed some light on how optimistic shareholders are in the state of the economy which usually has a knock-on effect on investment confidence.

Recent events are looking optimistic for the French though and COVID-19 cases and deaths are still falling which has prompted French president Emmanuel Macron to announce that Paris will also open its bars and restaurants today, in alignment with the rest of France, as the hospitality sector looks to find its footing again to alleviate the economic strain the virus has taken on many EU countries.

EU Emergency Funding Debate Continues

The ongoing discussions into the direction and distribution of the €750bn spending package are no further in determining when the money will be put into action to aid the EU countries who have been put under the most duress by the outbreak. More pressure to the EU councils will also be applied from the $2.7bn budget for the virus vaccine as there are now many companies at different stages at developing a trusted, safe vaccine that could be implemented. With such vast amounts of money being put into to getting back to a new normality after the lockdowns, it is crucial that this funding is used as effectively as possible to help many of the 27 EU member states get their finances are more solid ground. Any potential signs that large proportions of funds have been put to waste to put pressure on the single currency almost in the same way that Brexit has done to the UK in the sense that the lack of clarity and certainty creates a lack of confidence in the Euro. This could then weaken the euro and see the EUR/USD rates back closer to 1.10 should the US not receive any significant fluctuations on their side.

Get in touch with us using the form below if you have a currency exchange involving the euro, to see how these factors continue to impact the strength of the single currency and your international money transfer.