The pound to euro exchange rate has recovered towards the end of the week trading above 1.12 vs the euro during Friday afternoon’s trading session. The FTSE 100 has also started to show signs of recovery after some huge falls during the last few weeks.
One of reasons why sterling exchange rates may have improved could be attributed to what is happening in the UK’s stock market as it appears as though investors are moving money back in to the FTSE100 and this has provided the pound with some support.
Less than a fortnight ago the pound euro exchange rates were trading as low as 1.05 on the Interbank level and have now recovered by over 7 cents since the lows. Indeed, the lows earlier this month was the lowest pound euro exchange rates have been since the credit crunch period back in 2008.
BoE Announce Further Quantitative Easing
As the situation concerning Coronavirus develops, I fully expect the volatility to continue. The Bank of England have cut interest rates to just 0.1% earlier this month as well as announcing further Quantitative Easing and this stimulus has helped to provide some support for the pound which is another reason for the recent fightback made by the pound not just against the euro but against a number of different currencies.
Indeed, the pound hit its lowest level against the US Dollar since 1985 trading at just 1.14 but at the time of writing the pound US dollar exchange rates are back up to 1.23 on the Interbank levels.
On Friday it was confirmed that Prime Minister Boris Johnson has contracted Coronavirus. It appears so far that he is showing mild symptoms and with Prince Charles also contracting the virus it does show how far reaching this virus can be.
Coronavirus in the USA
With the US now the worst affected country in terms of live cases this could lead to a sell off for the US dollar and investors returning back towards the UK and this could be another reason why the pound has managed to claw back some of its recent gains.
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