Euro Rates Continue to Gain Despite French COVID-19 Outbreak

EUR to GBP Heads for Key Support Level

The euro to USD exchange rate has had a rather turbulent week despite the overriding gains that the euro rates continue to make. With day-to-day swings of 0.5 cents, the mid-market rate at time of writing sits just below 1.19 which puts the single currency at more than a two year high from May 2018. As the world’s most commonly traded currency pairings, any movements in their rates can have lasting effects on other currency pairings such as the GBP/EUR which could see the pound suffer if the euro is perceived as an increasingly resilient currency. Speaking of which, the euro to GBP exchange rate has been a relatively sluggish pairing at the moment with almost unprecedented levels of stagnant movements. Despite the rocky start to the year that the EUR/GBP exchange rate had witnessed, the last few months had seen just a 2-cent movement between 1.09 and 1.11. Investors buying euros have since had to bite the bullet and watch out for micro-developments within the pairing even if the rates have marginally moved in their favour to take advantage of them. On the other hand, euro sellers however are benefitting from the 10-cent drop from the 1.20 levels back in February.

French Police Enforce Face Mask Policy Amidst Outbreak

France, the country with the 7th highest COVID-19 death toll, has seen another recent spike in cases as Saturday saw its highest recorded number of cases since its lockdown was lifted earlier this year as the EU member state gained another 3300 new admissions. This prompted the governmental response of compulsory mask wearing between 18:00 and 06:00 which has not been fully adhered to. The seaside region of Marseille had 130 police officers arrive to enforce the mask wearing as people have not been sticking to the social distancing measures and wearing masks.

The country has recently been put on the UK “blacklist” for its holidaymakers receiving a 14-day quarantine period upon returning back to the UK. This will see further detriment to its tourism industry amidst a period in time that the Eurozone is seeing steep rises in unemployment as this year has so far seen a 1% increase and is expected to rise above 9% this year ahead of where it previously stood in 2020 at 6.5%. Previous analysis of job losses had seen heavy losses with the tourism and hospital section with restaurant workers being hit hard as Europeans look for domestic holidays as opposed to going abroad.

Euro Strength to be Driven by Pandemic This Week With Little Economic Data

This week and next week will be light on the ground for economic data as Friday is the only data which could provide any movement for the single currency. The end of this week will see the Markit Manufacturing Purchasing Manager’s Index data which albeit looking likely to be above 50 and therefore considered positive, is expected to remain relatively unchanged at 52 following a previous recording of 51.5. Unless this release falls away from expectation, the markets may be disappointed and may not provide any shifts for the euro.

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