GBP/EUR: Pound Pares Losses, Coronavirus & German Factory Orders In Focus

The pound declined versus the euro on Thursday. The pound versus euro exchange rate ended the day at €1.1539 down 0.17% on the day.

GBP/EUR traded a range of €1.1523 – €1.1599 amid ongoing coronavirus fears and Brexit trade deal concerns.

The pound is attempting to push cautiously higher in early trade on Friday. At 06:45 UTC GBP/EUR was trading at +0.05% at €1.1539

BoE Underpin Pound

Bank of England’s next Governor. Andrew Bailey continued with his calm approach to dealing with coronavirus’ impact on the economy has helped support the pound. He said that he would prefer to wait to see what the Chancellor comes up with in his Budget on 11th March before taking any decisions over cutting interest rates.

Mr Bailey’s relaxed attitude towards cutting rates underpinned the pound. As did Boris Johnson planning an economic response to coronavirus. News that Prime Minister Boris Johnson held talks with the Chancellor and the current BoE Governor Mark Carney to plan the government’s initial response to the coronavirus outbreak has reassured pound investors.

Whilst the UK government and the BoE aided the pound, Brexit headlines were not so encouraging. At the end of the first week of post Brexit talks, Chief negotiator, Michel Barnier warned of grave differences between the EU and the UK. Whilst he said that a trade a deal was still possible, he said this would only happen through mutual respect.

Today there is no high impacting UK data for investors to digest. Instead coronavirus news will remain in focus after the first UK coronavirus death is announced and the number of cases jump.

GBP/EUR: Euro Benefits As Safe Haven

The euro traded broadly higher versus other major peers on Thursday. There was no high impacting eurozone data for investors to digest in the previous session. However, the euro continues to benefit despite the spread of coronavirus on the continent picking up. The euro has emerged has the preferred safe haven amid the coronavirus outbreak. With the ECB running negative interest rates, investors view it as the least likely to make any large-scale easing moves.

Investors will look towards German factory orders which are due to be released today. Analysts are expecting factory order to increase 1.4% month on month in January, a stark improvement on February’s -2.1% decline.

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