The pound to euro rates remain rangebound this morning so far still below the key resistance level of 1.15 which we saw during last week’s trading session and over 9 percent better than the recent 1.0525 seen on 19th March.
As uncertainty over the spread of coronavirus has dispersed and both the UK and Europe in virtual lockdown the euro has lost a lot of it’s appeal to investors due to rising political uncertainties. The contentious ‘coronabonds’ still continues to be a sticking point for the eurozone and investors alike. The concern around common debt is centred on the North/South divide between those larger more frugal countries such as Germany and the Netherlands who fear a significant domestic political backlash in agreeing to finance the debt of the more traditionally extravagant South of the bloc. Unfortunately, this leaves those hit hardest by Covid-19 effectively incapable of receiving much needed financial aid to fight the virus and move on to recover economically.
French President Emmanuel Macron waded in to the argument this weekend speaking directly to the Financial Times. His comments have highlighted the political depth of this argument and the possible consequences of a failure to agree on much needed aid and a risk to the EU as we know it. Macron said there was “no choice” but to set up a fund that “could issue common debt with a common guarantee” to all member states according to their needs, rather than the size of their economies or their national debt. Rather alarmingly Macron is quoted as warning that the EU “political project” could collapse if this was not resolved. Wednesday’s meeting between finance ministers is now a key event for this weeks calendar.
UK Furlough Scheme Opens for Applications to HMRC
The UK governments furlough scheme opened for business today and has seen a significant take up from UK businesses all attempting to navigate through the coronavirus uncertainty. An astonishing 67,000 applications were received in the first hour of opening today.
With many UK businesses closed due to current lockdown there is an estimated 9million UK workers currently suspended on the scheme which has been extended to the end of June in an attempt to prevent a significant rise in unemployment and lost businesses during the current economic stagnation. This leaves the UK workforce trading water for the next few weeks while we await further guidance on how we will recover from this pandemic, both health wise and in our careers.
Questions Over Boris Johnson’s Response to the COVID-19 Threat
Prime Minister Boris Johnson has been facing criticism this weekend as it has become clear that he failed to attend initial Cobra meetings as the increased concern for ‘Wuhan flu’ was raised late January in the UK. In fact, it took almost five weeks for the PM to chair the meeting, according to protocol, by which point the virus had taken hold and the slow response by the UK government has left the NHS calling for supplies of critical personal protective equipment. The pound could find itself challenged if a public outcry follows these revelations as Boris Johnsons clear, decisive and focused leadership over the past month has seen an increased demand for sterling.
For more information on factors influencing GBPEUR exchange rates for an upcoming currency transfer, feel free to contact myself, Lauren Buckner, using the form below.