Despite slipping lower versus the Euro on the last two sessions of last week, the Pound versus Euro exchange rate ended the previous week 0.4% higher at €1.1388. This was the third straight week of gains for the Pound versus the Euro.
At 06:30 UTC, GBP/EUR is pushing higher, up +0.1% €1.1406 in what s expected to be a quiet session as markets across Europe are closed in observance of the Easter public holiday. There is no economic data due to be released for either the UK or the Eurozone, meaning the focus will remain firmly on coronavirus statistics and the week ahead.
UK Economy Could Contract 30%
The number of reported coronavirus deaths has passed 10,000 in the UK, up from 9,875 on Saturday. The number of hospital deaths has slowed however a delay in reporting and test results prevent a clear insight into the coronavirus curve.
On a positive note, Boris Johnson has been released from hospital and will complete his recovery in the Chequers residence in Buckinghamshire. He is not returning to work immediately.
The news comes as the UK government comes under increasing pressure to announce plans for an exit strategy. This will be key for investors to gauge the speed at which the UK economy will recover from the deep economic downturn expected. Chancellor Rishi Sunak told colleagues that the UK’s GDP could fall by up to 30%.
ECB Warns Of Long Road To Recovery
Italy, Spain and Germany reported a slowdown in new coronavirus cases, allowing governments across Europe to look towards ways of easing the lock down measures which has paralysed the economy.
In Spain the number of daily coronavirus deaths dropped to 617, whilst there were 4,167 new infections. Spain is starting to reopen its economy today with employees in construction and heavy industry returning to work. Investors will be watching closely to see how the lifting of tougher lock down restrictions impacts the coronavirus statistics over the coming weeks.
European Central Bank vice president Luis De Guindos warned that the eurozone could experience a deeper recession than the rest of the worked and could struggle to recover until 2021. These comments are dragging on the euro at the start of the week.