The pound to euro exchange rate has boosted higher breaking over 1.12 for GBP vs EUR in afternoon trading on Friday. The pound initially fell lower against the euro after it was announced that UK Prime Minister Boris Johnson has the coronavirus along with health secretary matt Hancock before making a strong recovery making good ground. Those looking to buy euros have been presented with better levels amidst the corona pandemic. Professor Chris Witty, the chief medical officer for England has too shown symptoms of COVID-19 highlighting just how contagious this disease is.
At the time of writing the death toll has jumped in the UK to over 700. The impact on the British economy in the months ahead is keeping the markets guessing and any gloomy developments and forecasts are likely to impact on the price of GBP to EUR exchange rates. The uncertainty revolves over when the pandemic will peak in the UK. Any extension beyond the next 12 weeks could see the pound struggle if Britain is unable to contain the virus. For example, if the peak looks set to happen in September then this would leave an even longer period of economic deterioration which could weigh heavy on the price of sterling.
The same of course is true in the Eurozone and euro exchange rates are likely to be directly impacted on how well countries such as Spain and Italy can contain the virus.
Next week sees a number of economic releases for the month of March and it will be interesting to see how much of an impact the coronavirus will have on these numbers since the social distancing policy was introduced. EU consumer and industrial confidence figures are released on Monday for the month of march and could help give some indication as to how businesses and consumers are adjusting to this new economic climate. EU unemployment data is released on Wednesday for the month of February although the manufacturing data as per the Purchasing Managers Index data for March is more likely to be more valuable in terms of a guide as to how the Eurozone is reacting to Covid-19.
If you’d like to discuss these factors and how they could impact an upcoming currency transfer, feel free to get in touch with me, James Lovick, using the form below.