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Pound Euro Exchange Rate Steady Ahead of ECB Rate Decision

Published: 10 Jun at 12 PM Tags: Pound Sterling, Euro Exchange Rate, Currency Exchange, Forex, Euro Crisis, UK, Exchange Rates, Economy, Inflation, France, Pound Euro Exchaneg Rate,

The Pound Euro exchange rate held steady today ahead of the European Central Bank’s (ECB) interest rate decision, which is expected to remain at 0%. The pairing is currently trading around €1.15.

The Euro failed to gain on the Pound (GBP) with Eurozone markets speculating over whether the ECB will dial back its Pandemic Emergency Purchase Programme (PEPP) in light of the improving outlook for the bloc’s economy thanks to intensive vaccination programmes.

Any signs of a more bullish ECB today would boost the Euro to Pound exchange rate.

In addition, any upbeat comments from the ECB President Christine Lagarde about positive economic news and inflation would also buoy the Euro.

In economic data, today saw the release of the latest French industrial output gauge for April, which fell below forecasts to -0.1%.

The Pound (GBP) held steady today despite new Sage models predicting a ‘substantial’ third wave of Covid-19 infections and hospitalisations in the next few months.

As a result, this has limited the appeal of Sterling with concerns over whether the 21 June final easing of lockdown measures could be delayed.

This has dampened confidence in the UK economy, which would suffer if lockdown restrictions were further extended beyond June.

In absence of UK economic data today, Pound traders have become more cautious about the outlook for the economy, despite those on furlough hitting a new low.

The Office for National Statistics (ONS) commented:

‘The proportion of the workforce of all UK businesses on furlough has decreased to 7% (approx. 1.8 million people), according to the latest Business Insights and Conditions Survey.’

Looking ahead, the Pound Euro exchange could fall this week if the final easing of lockdown measures seems more likely to be delayed because of rising Covid-19 infection rates.