The coronavirus pandemic has been wreaking havoc on the stock market and financial markets, causing weaker performance in many foreign currencies. This weakness is evident even in the EUR/GBP which happens to be one of the strongest currency pairs in the world.
The EUR/GBP exchange rate has experienced a dramatic decline over the past few days, which saw the price drop to a 2-week low. The price of the currency pair opened this week’s trading session at 0.8920 and it continued before bouncing back during Tuesday’s trading session after hitting its lowest point in two weeks at 0.8811 before a significant retracement took place. The currency pair’s performance is mainly due to the closure of industries as the coronavirus pandemic continues to ravage over the European markets. The viral threat’s negative economic impact has resulted in massive job losses and has even prompted governments to roll out economic stimulus measures.
Eurozone leaders are pushing towards a cohesive response to the ongoing crisis. They recently held a six-hour meeting in which the leaders acknowledged that the EUR is under intense pressure. Italy and Spain are the hardest hit by the coronavirus plague.
Meanwhile, Germany has also released a consumer confidence gauge, which is also likely to affect the Eurozone’s largest economy. Analysts are convinced that a massive economic recession might be underway if the European governments fail to manage the economic impact of the coronavirus outbreak. GFK consumer expert, Rolf Bürkl, advised manufacturers, retailers, and service providers to take the necessary measures.
The Euro remains fairly alluring overall despite the impact of the coronavirus
The European Union has expressed its commitment to finding long-term solutions, which will aid the economies hit by the coronavirus pandemic. There is already a proposal for a new stimulus package, which was announced by the President of the European Commission, Ursula von der Leyen.
The stimulus measures are expected to play a significant role in calming the markets. It has its effects both positive and negative. On the one hand, investors were pushed to sell the EURO currency from its highs. However, there is still some hope according to many financial analysts. Euro is still presenting an attractive status overall. It was stronger than the Pound.
The pandemic remains the primary center of attention
As investors continue to monitor the impact of the coronavirus across the nations, many leaders continue to pump more money in the slowing economies to bail out businesses. According to the Chancellor of the Exchequer, Rishi Sunak, they will do what it takes to fight back the deadly enemy.
Analysts are now calling on governments and central banks to act quickly not only to facilitate economic stability but also to support the people. The past few weeks have been quite challenging and the current outlook for the next few months does not look any different.