GBP/EUR drops to six-week lows, coronavirus crisis still driving movement

Coronavirus uncertainty rocks currency markets in AprilStaying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…

Latest currency news
The economic impact of the coronavirus pandemic has been the main driver behind currency movement over the past few weeks.
Last week saw the release of the UK’s latest flash GDP figure, which fell by -5.8%, while Germany – the Eurozone’s largest economy – entered a technical recession.
The pound fell to a six-week low of €1.11 against the euro, while the GBP/USD exchange rate fluctuated between highs of $1.21 and lows of $1.20.
Meanwhile, EUR/GBP rose to highs of £0.89 as Eurozone economies continued reopening, with France and Germany easing lockdown restrictions. EUR/USD is currently trading in the region of $1.08.

What’s been happening?
Brexit returned to the spotlight last week after the UK and the EU concluded their latest round of Brexit trade talks. Sterling stumbled after David Frost, Britain’s chief Brexit negotiator, said that the two sides had made ‘very little’ progress.
Last Wednesday also saw a slew of dire UK economic data, with UK growth falling in the flash estimate for the first quarter. Many analysts believe that the second-quarter will be far worse.
Meanwhile, the euro struggled after Germany’s first-quarter GDP posted its sharpest contraction since the 2008 financial crisis.
However, the euro ultimately came out on top as Germany and France moved to reopen their economies.
Finally, while the US dollar initially benefited from rising US-China trade tensions last week (after US President Donald Trump criticised Beijing’s handling of the coronavirus) poor US retail sales data and rising risk appetite saw USD slide before the weekend.

What do you need to look out for?
Although the latest unemployment rate dropped slightly to 3.9% from Jan to Mar this is expected to rise sharply for the next trimester due to the ongoing financial implications of the Coronavirus 19 pandemic. The Bank of England (BoE) Chief Economist Andy Haldane said that we could see a return to ‘80s levels of unemployment’.
US-China trade developments will continue to drive the US dollar this week. Any signs of deteriorating relations between the two superpowers could prove USD-positive.
EUR investors will be focusing on the Eurozone’s latest PMI reports and will be looking for indications that output is starting to recover now that economies in the currency bloc are reopening.

At Currencies Direct we’re here to talk currency whenever you need us, so please get in touch if you want to know more about the latest news or how it could impact your currency transfers. Since 1996 we have helped more than 325,000 customers with their currency transfers, so why not give us a call on 00351 289395739 to find out more or alternatively visit the website on and register to get regular updates on the currency markets.

Pin It

You must be a registered user to make comments.
Please register here to post your comments.