16 June 2020
Staying up to date with the latest currency news can help you time your transfers effectively, so find out what you should be looking out for over the next few weeks…
Latest currency news
The pound euro exchange rate has been trading statically at €1.11, while the GBP/USD exchange rate has recovered from $1.22 to $1.26.
EUR/GBP is unchanged at £0.89, but EUR/USD has pushed up from $1.08 to $1.12.
What’s been happening?
The pound has had some ups and downs over the past month, with news of the UK government’s plans to reopen the economy being offset by the growing risks of a no-deal Brexit, the latest coronavirus figures and speculation the Bank of England (BoE) may be exploring the possibility of negative interest rates.
The euro, on the other hand, has enjoyed some notable support in recent weeks, with the single currency being bolstered by steps taken to support the Eurozone economy through the coronavirus crisis.
An improvement in the ZEW economic sentiment surveys for German and the Eurozone was also EUR positive.
However, this week PM Boris Johnson lent the pound support by indicating that he sees no reason why the UK and EU can’t reach an accord before the end of the year, leaving the GBP/EUR exchange rate stable and helping GBP/USD edge higher.
What do you need to look out for?
In the UK all eyes will be on the BoE when it delivers its latest policy decision – any sign that negative rates will be introduced would be GBP-negative.
Also influencing the pound will be the UK’s coronavirus statistics, with a stubbornly high number of new infections likely to continue dampening the appeal of Sterling.
A key focus for EUR investors will be the EU summit, in which leaders will discuss the recovery fund with the aim of settling on deal by summer, with any setbacks here having the potential to weaken the euro.
The US dollar, meanwhile, will be driven by risk appetite. If the number of new coronavirus cases in China increase, fuelling fears for a second wave, demand for safe-haven currencies could rise, pushing USD exchange rates higher in the process.
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