Pound to euro exchange rates have been dropping slowly since the end of April from 1.15 to levels of 1.11 during the lockdown period.
The pound has come under increased pressure in recent weeks owing to the uncertainty of Brexit which appears to be raising its ugly head once again. The issue of Coronavirus has clearly caused uncertainty for the value of sterling exchange rates with the UK now with the second highest number of fatalities behind the US.
The UK was slow to act compared to several different countries and as of now the UK is now behind a number of countries in terms of reducing lockdown measures.
The UK has also spent a huge amount of money trying to support the economy with the furlough scheme which has been extended for another few months, albeit with companies now being asked to subsidise part of the scheme.
However, the real risk for sterling exchange rates comes from the uncertainty of Brexit. Brexit talks are once again in a stalemate and the risks of a no deal Brexit are once again rising. In previous years each and every time we have seen the risks of a no deal Brexit happening this has caused the pound to struggle against a number of different currencies.
As we move forwards into next month the Bank of England will be keenly watched for any change in monetary policy. The next meeting takes place on June 18th and there are rumours that the central bank may even consider cutting rates to a negative level.
On Wednesday morning ECB President Christine Lagarde is due to address the markets. The President's comments will be closely watched by anyone with a euro requirement to either buy or sell euros so it will be important to keep a close eye out for any announcements she may make.
This will be closely followed by the EU Financial Stability Review which will clearly be focused on the impact of the pandemic. Any surprise announcements could cause movement for GBPEUR exchange rates so make sure you're well prepared for any surprise movements for Sterling Euro exchange rates.
As we turn the focus towards what is happening in the US and we have seen GBPUSD exchange rates challenge 1.20 recently before strengthening back towards 1.22.
The US dollar has continued to be used as a safe haven currency and this is one of the major factors in the US dollar's recent strength against a number of different currencies including vs the pound and the euro. As we move towards the end of next week Thursday could be the biggest day in terms of GBUSD exchange rates when the US announces its next set of jobs data.
Jobless claims have hit in excess of 25 million during the pandemic and expectations are for another 2.1 million claims so anything different could cause further market movement for the US dollar.
US GDP is also out for the first quarter which is a revised figure on what has come out previously.The previous data showed a fall of -4.8% for the first quarter so anything different could cause movement for GBPUSD exchange rates.
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