Blog | ACE-FX
Est. 2007

ONLINE ORDERING ONLY - YOU MUST ORDER ONLINE BEFORE VISITING OUR STORES

Due to the latest Government advice and second lockdown, we are allowed to stay open but orders must be placed online before coming into any of our stores. For any assistance please call us on 020 7357 7373 (Mon - Fri: 9:30am - 3pm).

GBP / EUR Update

GBP

After a tough week last week, there was little respite for the pound this week. There was a note of optimism early in the week when promising news about a vaccine for Covid-19 from an Oxford lab; although there was a direct correlation between the breakthrough and the value of sterling, the positive news gave the ailing currency a brief boost on Monday. There was some background support from the Bank of England’s Chief Economist Andy Haldane, who told MPs that “Roughly half of the roughly 25% fall in activity during March and April has been clawed back over the period since… We have seen a bounce back. So far, it has been a 'V'”. The pound made slight gains despite news of high government borrowing as investors saw this as an inevitability. By Tuesday, however, the pound was in trouble, losing an average of 0.4% as fears grew about a lack of progress on Brexit and the emergence of the Russian political interference report casting a cloud over the Government. Brexit appeared to be the bigger issue; an analysis by Bloomberg found that the “risk of a no-deal Brexit is keeping investors away from the UK” and “the differences between European and UK markets are looking starker than ever”. There was at least some good news at the end of the week when retail sales grew by 8% in June, following a rebound of 12% in May. This is still 13.1% lower than the same month last year but the figures, along with the provisional PMIs for services and manufacturing both hitting the growth zone at 51.5 for services and 52 for manufacturing. There are signs that the high street may have a way to go to show growth; ONS data showed that £3 out of every £10 was spent online. However, it is worth remembering that the high street was only open for half of June and analysts will be looking for further progress when a full month’s data is available. For now, the pound remains in choppy waters, with consumer confidence forecast for -27 and no possibility of good news on the horizon after the EU’s chief negotiator Michel Barnier highlighted "considerable gaps remain in the most difficult areas" after the most recent round of talks, calling an imminent deal “unlikely.”

EUR

After some ambivalence over the announcement of the EU’s the €750 billion recovery package, investors warmed to the single currency. It found firmer footing before making gains as the week progressed. An improvement in consumer confidence in Germany helped the euro as confidence waned in the UK and US and figures announced at the end of the week showed that the country’s powerhouse manufacturing sector stabilised in July. The sector avoided contraction for the first time in 19 months after IHS Markit’s flash manufacturing Purchasing Managers’ Index (PMI) edged up to 50.0 from 45.2 in June, beating a forecast of 48.0. The composite PMI for manufacturing and services also beat forecast; the sectors account for two thirds of the German economy and a rise to 55.5, the first expansion since February and well above the forecast 50.3. All this good news flowing from Europe was good news for the central currency as fears around Russian interference and Brexit deadlock dampened the pound and investors continued to show no appetite for the US dollar.

European Union - Euro (EUR)
GBP
/
Euro (EUR)
/
EUR
£0.00
*Please note we do not accept 500 Euro notes and we do not accept any coins
*Please note we do not accept 1000 Swiss notes and we do not accept any coins
*Please note we do not accept coins