The Pound is pushing higher on the final day of the trading week, paring losses from the previous session.
The Pound versus Euro exchange rate settled on -0.2% lower at €1.1412, around the low of the day and significantly down from the high of €1.1482 on warnings that any ease in UK lock down measures would be very gradual.
At 06:30 UTC, GBP/EUR is trading +0.15% at €1.1429 as UK consumer confidence edges higher and ahead of the Eurogroup finance ministers meeting. UK markets are closed today for May Day public holiday.
GFK Confidence -33
The Pound is pushing northwards after data revealed that British consumer confidence increased in April, although it still remained close to the lowest level on record as the UK remains in lockdown and heading towards the deepest recession in 300 years.
According to GFK, the consumer confidence index rose -33 in the second half of April, compared to -34 in the first half of the month. Whilst this is a small step in the right direction, it shows that consumer confidence remains severely depressed.
The data comes after the Bank of England warned that it expected the UK economy to contract by 14% this year in the worst recession for 300 years. Unemployment is also projected to reach 9% before declining gradually. The BoE sees growth returning to pre-coronavirus levels mid-way through next year, as long as the lock down eases sooner that the later.
The BoE voted 7 -2 to keep monetary policy unchanged, with interest rates on hold at the historically low level of 0.1%.
Investors will now look ahead to Boris Johnson’s Sunday evening speech where he will unveil the UK’s exit strategy from lockdown.
Eurogroup Finance Ministers Meeting In Focus
The Euro is trading lower versus sterling ahead of the Eurogroup finance ministers meeting today. The meeting comes following the German constitutional court’s ruling that brings into question the future of the European Central Bank’s quantitative easing programme. ECB President Christine Lagarde has vowed to do whatever necessary, including the use of unconventional policies. She has also upped the pressure on Eurogroup leaders to increase fiscal support.
German trade data will also be in focus. Exports are expected to have declined -5% month on month in March, down from 1.3% increase the previous month.
