The pound to euro exchange rate has fallen lower this morning as the markets continue to react to coronavirus developments. The International Monetary Fund said yesterday that the global recession will be the worst since the Great Depression. Rates for GBP EUR sit at 1.1457 having hit a high of 1.1518 yesterday.
Those looking to buy euros have been presented with a better opportunity to purchase considering rates were below 1.06 for GBP vs EUR at the lowest point within the last 4 weeks. Tomorrow morning sees data from the British Retail Consortium for the month of march which will give some strong indication as to how badly the high street has been hit. The markets may begin to be able to anticipate what the dent to national output will look like on the back of these economic data releases.
Lockdown Easing Ahead?
In the EU the number of new Covid-19 cases is continuing to gradually decline whist cases in the UK are still yet to peak. The total number globally has now reached 2 million. Some EU countries are now beginning to lift restrictions to gradually reopen their economies. German Chancellor Angela Merkel is expected to meet ministers today to discuss easing restrictions.
Crucially investors are concerned with the overall hit to Gross Domestic Product in relevant economies but also the length of time that economies will need to remain in lockdown. Any solutions offered by governments around the globe that can allow for some normality are likely to be received by the markets positively.
EU Emergency Package
The euro has been sensitive to developments surrounding the EU’s planned emergency package to help rebuild economies that have been hit hardest by coronavirus. After a week of intense negotiations between EU finance ministers, the plan is expected to make available up to €1.5 trillion but there has been much disagreement between wealthier states in the North and those in the South. Countries such as Germany and the Netherlands which are wealthier do not want to guarantee the debt of poorer countries like Italy and Spain which have historically not been so good at staying within borrowing guidelines.
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.