Over the weekend we saw governments around the world impose stricter controls on the movement of people due to Covid-19 and the increasing number of reported cases and deaths. The UK government has introduced a number of measures to support the UK economy to contain the pandemic and deal with the economic fallout. This morning the House of Commons is looking to pass emergency legislation giving ministers greater powers to deal with the Coronavirus including powers to shut down ports and detain people suspected of having the virus.
The German government is preparing to setup a €600bn stabilisation fund, aimed at supporting companies running into difficulties. €100bn will be used to buy shares in struggling strategic businesses to stop them from collapsing.
Today, the market is light on economic data. The only noteworthy data that is being released today at 3pm is eurozone consumer confidence for March. This is forecast to come in at -14.2, but could find that this comes in sharply lower considering everything that is going on.
This morning at the time of writing, the pound is up 0.15% against the euro and is being supported at these levels after reaching a low last week on the interbank exchange rate of 1.0511. The cost of the UK governments financial support package will be substantial and could come in around 6% of UK GDP. To further assist businesses the government has stated that companies will not need to pay any VAT from now until the end of June and will have until the end of the financial year to pay their tax. Meanwhile the self-employed will have until January 2021 to meet the tax implications.
With all the market uncertainty and volatility, if you are in the process over the next 12 months looking to buy or sell the pound and do not have the funds available now, we can always secure your currency on a forward contract allowing you to secure an exchange rate today for a future payment. This requires a 10% deposit with the balance being paid on a date of your choice up to one year ahead.
If you’d like to discuss these factors and how they could impact your currency exchange, you can reach me directly using the form below.