The Pound is edging southwards versus the Euro on Friday. The Pound versus Euro exchange rate settled on Thursday +0.25% at €1.1494, down from the peak of €1.1534, the highest level that the pair has traded at in a week.
At 06:30 UTC, GBPEUR is trading -0.1% at €1.175 ahead of what is expected to be a quiet day with many European countries closed in observance of Labour public holiday. The UK remains open. The Pound is on track to gain 0.4% across the week.
UK Manufacturing PMI Up Next
The Pound advanced in the previous session after Boris Johnson declared that Britain was past its coronavirus peak. The Prime Minister promised to set out a plan next week to get the UK gradually back to normal life. In his first press conference since being taken ill with Covid-19, Johnson offered a glimmer of hope to the British public and pound investors.
The strict lock down measures implemented to stop the spread of coronavirus have had a devastating impact on the UK economy. The sooner that the economy can reopen, the sooner that the recovery can begin, good news for the Pound.
Today investors will look ahead to the release of UK manufacturing PMI data which will provide further clues as to the extent of the destruction caused by the pandemic. Manufacturing is expected to have held up better than the service sector. Analysts are expecting the final manufacturing PMI reading to confirm that manufacturing activity dropped to 32.8 on the index, whereby 50 separates expansion from contraction.
Labour Day In Europe
The Euro traded on the back foot in the previous session after the European Central Bank (ECB) monetary policy announcement. As expected, the ECB kept in main interest rate at -0.5%. The central bank added some new measures to support liquidity and perhaps most notably, didn’t expand the €750 Pandemic Emergency Purchase Programme as analysts has widely expected.
After 6 weeks of intense central bank action to cushion the Eurozone economy from the coronavirus crisis, the ECB have decided to pause and take stock of where it is.
There is no high impacting data from the bloc today. Investors will continue monitoring coronavirus statistics as the region gradually reopens.
