GBP/EUR exchange rate fluctuates amidst ongoing coronavirus uncertainty

The Pound Euro (GBP/EUR) exchange rate traded in a wide range this week, with the pairing briefly striking a new three-month high. 

Pound rocked by coronavirus concerns 

The Pound struggled to attract support at the start of this week’s session, as confirmation of England’s 19 July reopening was undermined somewhat by Boris Johnson’s striking of a more cautious tone regarding the lifting of restrictions. 

The GBP/EUR exchange rate then spiked in mid-week trade, with the pairing striking a new three-month high on the back of a stronger-than-expected UK inflation print. 

However, Sterling was unable to sustain its highs for long, as elevated UK coronavirus cases began to cast doubts over the government’s reopening plans. 

At the same time, the Euro also got off to a weak start this week, following some dovish comments from European Central Bank (ECB) President Christine Lagarde, who hinted the bank could potentially extend its bond buying programme into 2022. 

While the single currency was able to claw back some of its losses in the mid-week thanks to a pullback in the US Dollar, it was unable to make any meaningful gains against the Pound through the remainder of the week, amidst concerns over the spread of the Delta variant of the coronavirus through Europe.  

ECB rate decision in the spotlight 

Top of the agenda next week will be the conclusion of the ECB’s first policy meeting since altering its inflation target. 

With Lagarde hinting that the bank could alter it forward guidance to reflect the changes to its mandate, the bank’s policy statement could infuse some notable volatility into the euro. 

Also influencing EUR exchange rates next week will be the release of the Eurozone’s latest PMI figures. Will another robust expansion within the bloc’s private sector help to bolster the single currency? 

Meanwhile, the unlocking of the final parts of England’s economy could provide some support to the Pound next week, although ongoing concerns over the sustainability of the reopening could cap any upside in Sterling. 

The only GBP data of note next week will be the UK’s own PMI releases. These are expected to report that activity in the UK’s vital service sector continued to expand at an accelerated pace in July, and could provide a leg up to the Pound at the end of the session as a result. 

If you’ve got a GBP/EUR currency transfer to arrange, the team at TorFX are on hand to help. Get started now to access bank-beating exchange rates and fast, free transfers.  

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
SPI disclaims any responsibility or liability related to your access to or use of any third party content.