After a week of losing ground to the pound, the euro ended on a slightly higher note against sterling. It was given a slight boost by better-than-expected retail sales on Friday, after a morning of disappointing services and composite PMI data, coming in largely below expectations. This morning, however, German factory orders have come in low but, surprisingly, not as much as the markets had expected. The German, French and Italian construction sectors have also posted a decline in PMI figures, with a significant drop in Italy to a record low.
Earlier last week, euro weakened on the back of uncertainty over the cohesiveness of the European Union’s response to the coronavirus crisis. Germany, Australia, the Netherlands and Finland, nicknamed ‘the Frugal Four’, have so far refused any participation in a proposed ‘corobonds’ scheme to help out the countries hardest hit by the pandemic, such as Italy and Spain.
The ‘Eurogroup’ is set to meet tomorrow again. The markets will be watching close for any signs of inching towards a compromise, after its leader, Mario Centeno, warned last week that coronavirus and ‘its lasting consequences should not become a source of fragmentation’ for the eurozone.
