- EUR vs USD rate falls on cosecutive days this week
- EUR/GBP rate also down, retreating from a 2-week high on Tuesday
- Concerns remain for pound sterling despite its gains against the euro
In a week of relative calm and little volatility in the forex markets, the EUR to USD exchange rate has shown consecutive small daily falls back-to-back throughout the week with the EUR to USD rate falling 0.4% on Thursday. United Overseas Bank believes the underlying tone in the euro to US dollar rate has worsened and could see the rate fall below 1.0750 but just as Friday looked like it would close the same way EUR has started to sow seeds of recovery and even made small traction against USD.
Current EUR to USD rate: 0.9551 USD
Current EUR to GBP rate: 0.8969 GBP
Current GBP to EUR rate: 1.1150 EUR
EUR rate concers after lack of progress at EU summit
This comes after European Central Bank President Christine Lagarde reportedly told heads of government that the EU economy could shrink by as much as 15% this year as a result of the coronavirus pandemic and they risk doing too little, too late.
German Chancellor Angela Merkel made a pledge to back a huge stimulus package for the European Union but we are still waiting for the exact details of the confirmed support package to be announced, including when it will be available.
Merkel again rebuffed Italy’s calls for so-called corona bonds, a controversial pooled EU debt instrument, but the Italian prime minister Guiseppe Conte sounded upbeat. “We have made great progress, unthinkable until a few weeks ago,” said the Italian PM after the meeting.
EUR to GBP rate – both currencies impacted by shocking PMI figures
Meanwhile the euro is also on the back foot vs pound sterling. The GBP to EUR rate recovered from a two-week slump of 1.1284 on Tuesday to over 1.1453 as it stands on Friday. This despite concerns for GBP in its own right after the UK’s services PMI came in well below the already low expectations.
Michael Brown, currency expert at international money transfer and foreign exchange brokerage Caxton FX, had this to say, “Sterling trod water against the common currency on Thursday, trading within a relatively tight range for the duration of the trading day… despite the latest PMI surveys pointing to record-low levels of economic output on both sides of the Channel”.
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