The Pound is advancing on Tuesday, extending gains from the previous session. The Pound Euro exchange rate settled on Monday 0.4% higher at €1.1408, after picking up from an earlier low of €1.1344.
At 06:30 UTC, GBP/EUR is trading +0.2% at €1.1430 as the number of UK daily coronavirus deaths fall and ahead of UK service sector PMI data.
UK Covid-19 Fatalities Fall to 288
The Pound is trending higher as the number of daily deaths fall to 288, the lowest level seen since 29th March as the UK prepares to ease lock down measures and reopen the UK economy next week, after 6 weeks of paralyses.
Today investors are looking ahead to UK service sector PMI. Analysts are expecting service sector activity to have plummeted to an all-time low of 12.3 in April on the closely watched IHS/Markit Purchasing manger index. This is down from 34.5 in March, reflecting the full month of lockdown. The measures put in place to stem the spread of covid-19, caused demand for services to evaporate.
The government revealed on Monday that a quarter of all employees in Britain, 6.3 million workers, have been furloughed with 800,000 companies claiming £8 billion from the government to pay their wage bills through the coronavirus lockdown. The initiative is due to run until the end of June, although the Chancellor Rishi Sunak advised that there would be no “cliff edge” end.
Investors will continue digesting headlines surrounding the UK exit plan, with Boris’ exit strategy due this week. US – UK trade talks are also due to begin today.
Germany Ease Lockdown Measures Further
The Euro slipped lower in the previous session, following data which showed that Eurozone investors remain deeply gloomy. The Sentix Eurozone investor sentiment index came in a t -41.8 in May. This was well below expectations of -33.5, but slightly better than last month’s 42.9, reflecting the breath-taking economic crash that the region has experienced over the past 6 weeks. The gauge has moved tentatively higher as economies start to reopen.
Today the euro is trading broadly flat versus its peers as Germany easing lock down measures further is supporting the common currency. Large shops will be allowed to reopen from 11th May. Small shops have already reopened.
