Pound-Euro Recovery Extends as Markets Turn Blue and Bank Stands Pat

The British Pound advanced against the Euro on Thursday alongside a lift in global equity markets, as investors bet that global central banks and governments had done enough to minimise the negative economic impact of the coronavirus outbreak.

The risk of Pound Sterling falling to parity against the Euro is considered to be high by foreign exchange analysts at Nordea Markets, one of Europe's major lenders and investment banks.

A surge in demand for Euros and the market's lingering distaste for Sterling has seen the Pound-to-Euro exchange rate endure another +1.0% decline in the space of 24 hours.

The Pound-to-Euro rate rallied into the weekend and the charts suggest it could extend that corrective rebound over the coming days, although the technical winds are now against Sterling and the market verdict on the government's latest measures for dealing with the coronavirus is a risk to the currency this week.

Pound Sterling has appreciated in value by 3.0% on March 19 following a decision by the Bank of England to cut interest rates and significantly boost its quantitative easing programme while similar moves by the European Central Bank appear to have put a lid on Euro strength.

Global stock markets are stabilising as some semblance of investor confidence creeps back following yet more strong central bank interventions, the confidence is in turn creating the conditions for a potential stabilisation in the GBP/EUR exchange rate which fell to its lowest levels since 2008 in the past 24 hours.

The first timely survey of the Germany economy that will account for the impact of the coronavirus outbreak confirms a substantial deterioration in business sentiment owing too the virus.

The British Pound simply cannot catch a break against a fast appreciating Euro, with the spot Pound-to-Euro exchange rate dipping below 1.10 on Monday, March 16 amidst an ongoing coronavirus-inspired market slump.