Published: 24 Mar at 5 PM Tags: Euro, Pound Sterling, America, UK, Eurozone, USA, France, Germany, Italy,
The Pound to Euro (GBP/EUR) exchange rate rose by over 1% today, with the pairing currently trading around €1.08.
The Euro (EUR) suffered today after the publication of the flash Eurozone Composite PMI for March, which showed a significant decrease into contraction territory from 51.6 to 31.4.
Chris Williamson, the chief business economist at IHS Markit, commented on the report:
‘Business activity across the eurozone collapsed in March to an extent far exceeding that seen even at the height of the global financial crisis. Steep downturns were seen in France
and across the rest of the euro area as governments took increasingly tough measures to contain the spread of the coronavirus.’
With the Euro-area now under lockdown, the economic outlook for the bloc is likely to continue to deteriorate. As a result, this has compromised the market appeal of the single currency.
Sterling edged higher against the single currency despite Downing Street’s announcement of a UK nationwide lockdown to prevent the spread of the coronavirus.
Today also saw the release of the UK Markit Services PMI, which plummeted into contraction territory due to Covid-19’s impact on the British economy.
Duncan Brock, the Group Director at CIPS, commented on the report:
‘As more serious measures are considered by the UK Government, the effect of coronavirus on businesses will get much worse. Even with interest rates cuts and an injection of cash into the economy to support struggling businesses, the inevitable rise in unemployment is sure to follow along with business failures especially amongst SMEs.’
However, the Pound still managed to tick higher against the weakened Euro today as the Eurozone’s economy continues to tread closely towards a recession.
Looking ahead, we could see Sterling edge higher if Chancellor Rishi Sunak reveals any further stimulus measures to bolster the UK economy going forward.
Meanwhile, Euro investors will be focusing on coronavirus developments in Italy
. If we see any news that the death toll is beginning to ease off, we could see the single currency claw back some of its losses.
As of Tuesday, 24th March 2020, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.0914, and GBP USD exchange rate was 1.1791.