The Pound is holding steady in early trade on Friday, after advancing versus the Euro on Thursday.
The Pound versus Euro exchange rate settled in the previous session +0.2% higher at €1.1501. The Pound is on track to gain 0.8% versus the Euro across the week, in its third fourth consecutive week of gains.
At 06:30 UTC, GBP/EUR is trading flat at €1.15 on improved sentiment.
Pound Gains Despite Lock Down Hit To Economy
The Pound is holding onto gains despite the UK government extending the British lock down for at least another three weeks. The announcement came as an additional 861 people died from coronavirus, taking the death toll to 13,729. The number of cases breached 100,000. However, only 4,618 tested positive in the past 24 hours indicating that the number of new cases remains stable.
According to the latest YouGov poll, the government has overwhelming public support to extend the lock down, despite the growing alarm at the economic consequences of such as move. Just yesterday the data from the British Retail Consortium showed that retail sales slumped 27% year on year across the first two weeks of the lock down. A separate report, from the Office of National Statistics showed that 25% of businesses had temporarily closed or paused trading since the lock down. Even in these that remain open, a fifth of workers have been placed on temporary leave.
The data is quite horrifying. However, the Pound is holding stead on improved sentiment amid reports of a potential treatment for coronvirus. A Gilead drug had shown positive results in a clinical trial, boosting. News of potential treatment could lead to economies being opened up more quickly.
Eurozone Inflation To Drop?
The Euro was under pressure across the board on Thursday thanks to the stronger safe haven US Dollar. The Euro trades inversely to the greenback, which jumped on another week of sky high initial jobless claims.
Today the opposite, the weaker US Dollar on improved sentiment is seeing the euro push higher.
Today Eurozone inflation data will be in focus. Analysts are expecting inflation to increase just 0.7% year on year in March, down from 1% in the previous reading. Tumbling oil prices and low levels of consumption are set to weigh on inflation. Weak inflation data could drag the euro lower.
