The EUR/GBP currency pair demonstrated noteworthy bearish momentum on Thursday’s trading session as European economies continue to bear more economic pressure as the coronavirus threat proves to be too much of an adversary.
The EUR/GBP has demonstrated bearish performance for the better part of the week and the situation was no different on Thursday morning. The currency pair’s exchange rate remained below the 0.8799 resistance level despite attempted rallies but overall the bears have been winning. The price managed to break through the 0.8759 support level as it charged towards the 0.8737 support which it also crossed towards midday.
The EUR/GBP’s bullish performance may also have been exasperated by the fact that EU heads have been having a hard time trying to reach a consensus over how to adequately support their economies. Finance ministers from European countries met on Wednesday to discuss how to counter the economic downturn that has been fueled by the negative impact of the coronavirus. However, they seemed to disagree over the proposed economic measures and aid measures in handling the health situation.
Meanwhile, the coronavirus continues to hurt European economies as the spread continues. So far more than 700,000 people have contracted the virus in Europe and more than 60,000 people have died. Analysts expect the impact of the economy to continue affecting the European economies. Germany which is the largest European economy reported on Wednesday that it expects its economy to contract by 4.2 percent this year due to the coronavirus’s negative impact on the economy.
Some analysts claim that the economic downturn caused by the coronavirus will be the worst that European countries have experienced for the last 7 decades. Germany, France, and the UK are among the major European economies that are likely to experience the sharpest economic decline. France is currently experiencing its biggest quarterly contraction it has experienced in 5 decades and has already entered a recession. Germany is also headed towards its worst recession in history and many other countries across the world also forecast dark times ahead.