Pound Sterling Euro (GBP/EUR) Exchange Rate Muted as PM Moved to Intensive Care
The Pound Sterling Euro (GBP/EUR) exchange rate edged lower, leaving the pairing at around €1.1297.
Pound sentiment was left fragile on Tuesday morning after Prime Minister Boris Johnson was moved to intensive care.
Due to persistent coronavirus symptoms, and on advice of his medical team Johnson was moved to intensive care. Downing Street said the Prime Minister was receiving ‘excellent care’ and noted he was still conscious.
This sparked some uncertainty and according to Ilan Solot, an FX strategist at Brown Brothers Harriman:
‘If he is impaired from resuming his official duties, then it creates some complications but we have to wait and watch.’
Uncertainty also increased as the country has no formal succession plan if the PM becomes incapacitated. Although, Johnson asked Foreign Secretary, Dominic Raab to deputise.
Commenting on this, Edward Moya, senior market analyst at OANDA said:
‘It is unclear what the emergency succession plan would be for the prime minister. Markets hate uncertainty and this does not bode well for further steps in battling COVID-19 and for future Brexit trade negotiations.’
Coronavirus Cases in Europe Slow
Investors were kept on edge today as underlying concerns about the global economy as coronavirus remained the main catalyst for movement.
The number of cases in Europe started to slow, which likely boosted EUR.
Many investors are now looking for a peak in the pandemic. Although, some have warned of an increase in volatility due to the unpredictable nature of the virus.
Commenting on this, Takuya Kanda, general manager of the research department at Gaitame.com Research Institute in Tokyo said:
‘Signs of a slowdown in the spread of coronavirus provided markets a boost, but the reality is we cannot be certain, so it’s natural for the Dollar to come lower.
‘It’s difficult to trade solely on the factors from one country, because so many countries are in a bad state because of coronavirus.’
Pound Euro Outlook: Coronavirus and Boris Johnson in Focus
Looking ahead, the Euro (EUR) could be offered some support against the Pound (GBP) following today’s Eurogroup meeting of finance ministers.
If ministers can come together and show solidarity after last week’s publicised disagreements, the single currency will rise.
Meanwhile, Sterling will remain under pressure if the Prime Minister remains in intensive care for his coronavirus symptoms.
Uncertainty will increase the longer Boris Johnson remains in hospital, and will leave the Pound Euro (GBP/EUR) exchange rate lower.