The Euro is attempting to claw back some losses from the previous session on Wednesday. The Euro fell versus the Pound in the previous session after the German constitutional court ruled on the European Central Bank’s stimulus programme. The Pound Euro exchange rate settled on Tuesday +0.6% at €1.1475, down the from high of €1.1506.
At 06:30 UTC, GBP/EUR is trading -0.05% at €1.1469 as investors look ahead to Eurozone service sector PMI and as the number of UK coronavirus fatalities overtakes Italy.
UK Virus Woes
The Pound is edging lower on grim news across the board. The UK covid-19 death toll passed Italy’s on Tuesday, after an additional 693 UK Covid-19 hospital deaths were recorded, taking the total to 29,427, past Italy’s 29,315. The frustratingly slow decrease in deaths come as the UK government prepare to announce lockdown easing measures later this week.
Lloyds Bank said yesterday that it lent more than £1 billion to small businesses on Monday, when a new 100% state guaranteed loan scheme opened to help support small businesses weather the coronvirus storm. The bank confirmed that over 32,000 small businesses applied for the bounce back loan, illustrating the scale of the impact that the coronvirus lock measures are having on businesses.
There is growing speculation that the Government could start to scale back its fiscal support, which is disappointing investors.
UK construction PMI is the only release on the UK economic calendar. Analysts are expecting it to show a slump to 22 in April from 39.2 in March. However, with construction sites starting to reopen in the coming days, this should be the low point for the sector.
Euro Attempts To Bounce Back After German Court’s Shock Ruling
The Euro was the worst performing major currency in the previous session after the German constitutional court questioned whether the European Central Bank legally purchased €2 trillion worth of debt during its QE programme from 2015. The court also questioned whether it was done proportionally. The 7 -1 vote against the ECB caught the market by surprise resulting a in sharp sell off in the Euro. The ECB now has 3 months to prove that the purchases were not only necessary but also proportional.
Today attention is firmly back on the Eurozone economic calendar with the release of German factory orders, and eurozone service sector PMI figures under the spotlight.
