The pound to euro exchange suffered a changeable week this week, as it saw massive dips and modest swells in line with the ongoing coronavirus crisis. Sterling’s biggest low this week came after Prime Minister Boris Johnson delivered an announcement on Tuesday night that saw the UK forced into full lockdown. The measures included the closure of many “non-essential” shops and businesses which saw the pound plummet.
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But there was good news this morning after the pound soared to its highest level in a week.
The pound is currently trading at a rate of 1.1081 against the euro according to Bloomberg at the time of writing.
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Michael Brown, Currency Expert at Caxton FX spoke exclusively to Express.co.uk.
He said: “Sterling continued to gain ground against the euro on Thursday, as a broad-based improvement in risk appetite helped to push the pound to its best levels in a week, back above the 1.10 handle.
“Today, attention will remain on the coronavirus pandemic and the policy responses to it, while investors wait and see whether the upbeat sentiment can stretch into a fourth straight day.”
It came as the Bank of England decided to keep interest rates at a steady 0.1 percent yesterday.
The move comes as no surprise as the policy continues to be effective to British businesses and consumers.
Jeremy Thomson Cook, Chief Economist of Equals said the efficacy of the response will “primarily be measured by how quickly the money finds itself in the hands of businesses and consumers that need it”.
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He continued: “There are two facets to central banking; policy and communication.
“We have seen the policy already – cutting the base rate to 0.1% and expanding the Bank’s balance sheet via QE – and now the Bank of England must continue to communicate the efficacy of these policies to British businesses and consumers.”
“The Bank can stand up and say that they will do whatever is necessary and of course, size does matter, but the efficacy of the response will primarily be measured by how quickly the money finds itself in the hands of businesses and consumers that need it.
“This is the Treasury’s job and we hope to hear more on this from Chancellor Sunak later.
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“Sterling is currently trading at a one-week high versus the dollar as investors become a little more optimistic on stimulus from Washington but a continuation of the joined up thinking that the BOE and Treasury are exhibiting is also a positive for the pound.”
Following BoE’s decision, currency analyst at OFX Sebastien Clements said the move has “steadied the ship”.
He added: “The Monetary Policy Committee has somewhat steadied the rocking British ship this afternoon by deciding to keep UK interest rates unchanged at 0.1 percent, following two emergency cuts earlier this month, a decision that will come as no surprise to most as economic decision makers run low on stimulating policy options.
“The outlook moving forward looks bleak for the UK as it is expected that the coronavirus will leave long-lasting structural damage to the UK economy.
“The pound has flirted with levels not seen since the 80’s and at present, it seems there is little chance of surging to the $1.30 psychological handle that has been so important over the past few years.
“However, UK businesses have in the past shown themselves to be extremely resilient in the face of adversity and with the help of Chancellor Rishi Sunak’s fiscal stimulus, and further easing from the MPC (as and where they can), we hope that the worst of the coronavirus fallout will be offset.”
Despite the UK’s current travel restrictions, there are still those who need to exchange currency.
The Post Office is continuing to offer travel money exchanges.
Today, The Post Office is offering €1.0483 for amounts of £400 or more, and €1.0689 for amounts of £1,000 or more.
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