Pound to euro exchange rate has plunged dramatically this afternoon and is dominated by coronavirus (Image: Getty Images)
The pound to euro exchange rate has plummeted this afternoon amid the coronavirus pandemic. The sharp drop came despite GBP trading close to its highest levels in a week yesterday. This is what you need to know.
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The pound is currently trading at 1.0837 against the euro, according to Bloomberg at the time of writing.
Michael Brown, currency expert at international payments and foreign exchange firm Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures this afternoon.
“Sterling has now pared all of its earlier advance, recently hitting session lows against the common currency as sentiment flips to risk-off once again with investors continuing to closely monitor the coronavirus pandemic,” said Brown.
“The latest move to risk-off seems to come as a result of a ‘buy the rumour, sell the fact’ reaction to yesterday’s US fiscal stimulus package.”
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Pound to euro exchange rate: The pound is currently trading at 1.0837 against the euro (Image: Bloomberg)
Greg Baggio, Head of Performance at WeSwap commented: “Across all markets, we’ve seen extreme volatility levels and the FX market is no different.
“Currency movements are not only driven by headlines on COVID 19’s progress, but also by the various governments and central banks’ decisions on interest rates and cash injections to support their economies.
“The ultimate question the markets are asking is, ‘How strong is a country going to come out of the crisis and will they be able to attract investment again?’
“In addition, some currencies like the US dollar are considered a safe-haven when everything else goes nuts and the dollar’s strength has been detrimental to the pound in the last two weeks, dropping from highs of 1.32 down to around 1.15.
“Although we’ve finally seen some relief as the stock markets bounced back today following the US Government’s agreement of a $2 trillion stimulus package.”
The drop in exchange rate comes at sharp contrast to its movements this earlier today.
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Mr Brown previously told Express.co.uk: “Sterling has spent the morning session consolidating the gains that it made against the common currency yesterday, trading close to its highest levels in a week.”
However, as the pandemic sees cases continue to rise the exchange rate is “vulnerable.”
“The pound, as a risk-sensitive currency, remains vulnerable to any negative coronavirus-related headlines,” explained Brown.
Ian Strafford-Taylor, CEO of Equals also shared his expert opinion with Express.co.uk.
“To say that the coronavirus and the global fallout has hit the pound hard is an understatement,” he said.
“Even compared to the start of March, the pound is down significantly against both the euro and the US dollar.
“Since the outbreak, we’ve seen 10-year lows against both currencies which just goes to show the devastating impact the coronavirus has had on the pound.”
Exchange rate: “The coronavirus pandemic is an unprecedented event in modern history” (Image: Getty Images)
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“The coronavirus pandemic is an unprecedented event in modern history and together with the impact Brexit has had on currency to date, the pound is extremely vulnerable right now.
“Although it is very low against the euro, it’s not quite at parity.”
“It’s difficult to predict exactly what will happen, but whether or not the pound will recover, and at what rate, depends on the government’s response as the crisis unfolds.”
The major shifts in the exchange follow Prime Minister Boris Johnson’s announcement that the UK will be put on lockdown to halt the spread of the coronavirus.
Mr Johnson told the public in an evening announcement on Monday that the nation is currently in the throes of a national emergency.
He urged people to stay indoors in order to “save lives”.
Those residing in the UK have been warned that venturing outdoors is strictly prohibited unless it is to buy food, carry out “essential” work or for medical reasons.
One outdoor trip for exercise each day is also permitted.