Pound to euro exchange rate: GBP remains in a ‘tight range’ but could 'weaken' later today

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Pound to euro exchange rate: GBP remains in a ‘tight range’ but could 'weaken' later today

Last night, after lots of speculation, France was removed from the UK’s quarantine exemption list. Britons in France now have less than 24 hours to

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Last night, after lots of speculation, France was removed from the UK’s quarantine exemption list. Britons in France now have less than 24 hours to make their way home before being hit by the quarantine rules from 4am on Saturday. The Netherlands, Monaco, Malta, Turks and Caicos, and Aruba were also removed from the list.

Today, the eurozone will be at the forefront of the economic agenda with second quarter GDP growth figures set to be released.

It is expected that the euro area’s economy will have shrunk, which could have an impact on the exchange rate today.

It comes as UK data this week showed that the country has plunged into its first recession in 11 years.

Sterling is currently trading at a rate of 1.1053 against the euro, according to Bloomberg at the time of writing.

READ MORE: Holiday money: Pound now stretches further than last year

He added: “In the absence of any UK data again, today’s focus will turn to the Eurozone’s Q2 GDP data release.

“The market will compare it to the UK’s GDP data from Tuesday, looking for any clues to GBPEUR’s next move.

“If the European data release is better than expected, the pound could weaken further against the single currency, putting the next support level of 1.1000 at risk.”

George Vessey, UK Currency Strategist, Western Union Business Solutions said that GBP continues to be driven by “risk appetite”.

He said: “The British Pound continues to be driven primarily by risk appetite and demand for the US Dollar and Euro.

“The US currency remains under pressure and the euro remains strong, which has helped GBP/USD firm above $1.30, but dragged GBP/EUR back towards the €1.10 mark.

“Initially, market participants largely ignored the dismal UK data yesterday morning, but throughout the day sterling selling intensified.

“The second quarter UK GDP contraction of 20.4 percent represents the largest contraction reported by any major economy so far and twice as large as the US and Germany.

“The rebound in output in June offered a glimmer of hope for the UK economy, but in a world plagued with uncertainty, not only from coronavirus but also escalating geopolitical tensions, the pound is likely to be driven more so by external factors and risk sentiment in the short term.

“This time last year, GBP/USD was trading around $1.23, and only five months ago had fallen to a 35-year low of $1.14.

“Despite dipping slightly over the past week, the currency pair is currently still over two cents above its average rate of 2019 and four cents above its average rate of 2020.”

The Post Office Travel Money is currently offering rates of €1.0650 for amounts of £400 or more, €1.0805 for amounts of £500 or more, and €1.0860 for £1,000 or more.



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