Despite plenty of bad news the Pound managed to cling onto gains versus the Euro on Wednesday ending the session just 0.2% higher at €1.0918. The pair pushed through the key psychological level of €1.10, however was unable to maintain this level.
Today, at 06:30 UTC, GBP/EUR is trading -0.6% lower at €1.0850 as investors look ahead to Bank of England.
Deep Recession Expected
The Pound had a particularly volatile session in on Tuesday as the number of coronavirus cases continued to escalate and as more data revealed the devastating impact coronavirus was having on the UK labour market.
On the third day of the lock down the number of coronavirus cases in Britain increased by 1452 cases whilst the daily death toll increased by 43. Analysts are suggesting that the number of cases in London are increasing at a faster rate than those in Lombardy, the worst hit area of Italy. The virus doesn’t discriminate and even Prince Charles has tested positive.
The scale of the incoming surge in UK unemployment stemming from coronavirus outbreak was revealed in Parliament on Wednesday. Officials disclosed that almost 500,000 people had registered in the past nine days to claim the main welfare benefit, universal credit. The scale of the increase in enormous.
Today attention will turn to the Bank of England which will give its rate announcement. After two between meeting rate cuts which have taken interest rates to 0.1%, the lowest level on record, the bank is unlikely to cut again. Investors will be keen to here Andrew Baily’s views in his first meeting as Governor.
German Consumer Confidence In Focus
The euro traded broadly higher versus its peers in the previous session despite data showing that German business morale fell to the lowest level since 2009. According to the IFO institute business morale recorded it largest fall since the county’s reunification on 1990. The business climate index fell to 86.1 in March, down from 96 in February, as the institute said the Germany economy was in shock.
Today German consumer confidence data for March will be in focus. Germany has unveiled plans to take on new borrowing for the first time since 2013 to cushion the impact of the coronavirus pandemic.