Pound to euro exchange rate rises after slumping to two-week low amid coronavirus

Pound to euro exchange rate rises after slumping to two-week low amid coronavirus

The pound to euro exchange rate has successfully recovered as the week passes the half-way mark. GBP rose back above the 1.14 handle after slumping to a two-week low. The drop came as a collapse in crude oil prices resulted in a broader softening of risk appetite.

However, the latest PMI surveys will also be released, proving “today’s calendar highlight.”

The pound is currently trading at 1.1419 against the euro, according to Bloomberg at the time of writing.

Michael Brown, currency expert at international payments and foreign exchange firm Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures this morning.

“Sterling gained ground against the common currency yesterday,” said Brown.

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“It reclaimed the 1.14 handle overnight, as stabilisation in the oil market helped sentiment to firm, thus resulting in decent demand for the pound.

“Today, the coronavirus pandemic will – of course – remain the main focus of investors’ attention.

“The latest PMI surveys from both sides of the Channel are today’s calendar highlight, as market participants continue to grapple with the virus’ economic fallout.”

Yesterday, it was revealed that the UK’s inflation rate had fallen to 1.5 percent in March.

This was mainly driven by falls in the price of clothing and fuel ahead of the coronavirus lockdown.

Jeremy Thomson Cook, Chief Economist at Equals, commented: “UK inflation stayed steady at 1.5 percent in March but the wider picture around prices shows that we will not be talking about high inflation for some time.

“A recession like the UK is currently enduring – we will wait on the data to confirm – naturally will see lower inflation through the destruction of a demand side to the economy whilst movements in oil markets of late show just what can happen to prices when demand dries up.”

“You cannot have inflation without demand and if we are correct that demand rebounds slower than it fell – a Nike tick-shaped rebound – then the impulse into inflation should be low although a weak pound does remain a risk.

“This news will be welcomed by policymakers at the Bank of England who can focus on supporting the wider economy as opposed to controlling inflation for now.”

Of course, for many Britons, taking holidays and requiring travel money is still far off as travel bans remain in place.

However, Matt Crate, Managing Director of peer-to-peer currency exchange platform WeSwap, has recommended beginning your budgeting now to get a head start for your next trip.

“There are some things that will still be the same,” he said.

“Exchanging travel money to Euros or Dollars now, setting hotel and flight budgets or even beginning to budget for your holiday spend would be a great use of time and an incentive to look ahead to your next getaway.”

Published at Thu, 23 Apr 2020 06:44:00 +0000