The pound to euro exchange rate has been trading in a fairly narrow range during the course of this with the occasional improvement against the euro briefly hitting 1.15 on the Interbank level on a couple of occasions.
The new figures out from the British government have confirmed a total of over 26,000 people have lost their lives to the Coronavirus with statistics now including those in care homes.
Dominic Raab who held the press conference last night claimed that lockdown will not be eased until they know that a ‘second peak’ can be avoided. He went on to say that is a real risk which could in turn lead to more people losing their lives and it could also cause further damage to the economy. He also went on to claim that the government are working on plans to review lockdown but also actively encouraged patience in order for the government to look at a second phase. The UK are set to review the next lockdown will be 7th May so everyone in the entire country will be interested to see what happens by then.
In terms of the strength of the pound this can almost be directly attributed to how the government has intervened with monetary policy as well as its handling and speed of the lockdown. Therefore, if the UK takes responsibility and ownership of the situation and exercise caution to both the health of its people and the economy then this could help to support sterling.
Clearly, every nation globally is being negatively affected by what has happened during the last few months so keep a close eye on the announcement in just over a week’s time.
With so much negative news during the last few weeks we appear to be seeing some light at the end of the tunnel on the continent. France has announced measures that is considering bringing into effect as of the 11th May when the current status is due to be reviewed. This includes the opening of a large number of shops as well as allowing individuals to travel further than they have been able to travel since lockdown measure were put in place in early March. France appears to be using testing as a way to take things forward with the aim of 100,000 tests per day by 11th May.
According to reports Spanish PM Pedro Sanchez has said a relaxation of rule may come on 4th May. He went to say ‘we are starting to glimpse an outcome that will be a reward for the huge collective effort made over the past weeks.’
All these signs are glimpses in to the near future that the lockdown is coming towards an end bringing a lot more optimism to global stock markets as well as providing people across Europe more freedom than they have been used to in recent weeks.
The US confirmed that it suffered its biggest contraction in over ten years during the first quarter of this year following the world’s leading economy to introduce lockdown measures during March. The US economy shrank by 4.8% which is the first fall since 2014. However, what is if real importance to note is that the US was one of the last nations to adopt the lockdown approach so yesterday’s figures were only a brief snapshot of was has happened recently.
The US Federal Reserve met last night and confirmed they would be keeping interest rates om hold so this did little to impact GBPUSD exchange rates. The central bank has already cut interest rates to historic lows as well as having introduced a stimulus package of USD$2.3trn so it may take a little more time to see the effects on the US’s economy during the pandemic.
Since the lockdown more than 26 million people have put in jobless claims and the figure is set to continue to rise when figures come out at the end of this week.
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