Currency News: Pound To Euro Exchange Rate Near Best Buy Into Bank Holiday Weekend – Exchange Rates UK

The British Pound to Euro exchange rate is seen range-bound as the UK head into the stay-at-home Bank Holiday weekend.

£1 currently buys 1.13855 euros at the inter-bank rate.

“The pound may also be getting a modest boost from the absence of news on EU-UK trade talks; each passing day suggests that the UK might request an extension to the transition period, although the PM is strongly opposed to such a move” says Shuan Osborne, Chief FX Strategist at Scotiabank ahead of the UK Bank Holiday weekend. “Monthly GDP figures released this morning showed that the UK economy unexpectedly shrank by 0.1% in February—prior to the lockdown—which suggests that maybe the country was not faring all that well after peak Brexit and electoral uncertainty. The GBP will be bound by the market mood and is likely looking to a move higher if the PM is transferred out of the ICU, though optimism over his health may very well be fully priced in now.”

The Pound Sterling Euro (GBP/EUR) exchange rate remained largely flat on Thursday afternoon, leaving the pairing trading at around €1.1400.

The Bank of England (BoE) agreed to temporarily lend the British government money if needed in order to finance its huge coronavirus spending plans.

The bank revived the measure used during the global financial crisis in 2008, and stressed that this was a short-term measure, and any money borrowed would be repaid by the end of 2020.

In a joint finance ministry statement, the BoE stated:

‘As a temporary measure, this will provide a short-term source of additional liquidity to the government if needed to smooth its cashflows and support the orderly functioning of markets, through the period of disruption from COVID-19.’

However, this had little impact on Sterling and according to Andrew Mulliner, a portfolio manager at Janus Henderson Investors:

‘We see this step as more sensational at a headline level than any significant step into the sort of monetary financing that invites comparisons to Zimbabwe.’

Meanwhile, markets are going to focus on today’s meeting between Eurozone finance ministers.

On Monday, finance minister failed to come to an agreement on an EU-wide fiscal stimulus plan. The start of the week saw ministers fail to come to an agreement after a 16-hour meeting.

This prompted European Central Bank (ECB) chief, Christine Lagarde to call for members of the bloc to put their differences aside and come together.

Investors will be focused on this afternoon’s meeting between ministers to see if they can put their differences to one side to agree on a coronavirus plan.

Meanwhile, on Thursday, the head of the International Monetary Fund (IMF) said the coronavirus pandemic will cause global growth to turn ‘sharply negative’ this year.

This could cause the sharpest contraction in growth since the 1930s Great Depression, with only a slight recovery seen in 2021.

Speaking today, IMF Managing Director Kristalina Georgieva said:

‘Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020. Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year.

‘I stress there is tremendous uncertainty about the outlook: it could get worse depending on many variable factors, including the duration of the pandemic.’

Pound Euro Rate Outlook: Will EU Ministers Unite Over Coronavirus?

Looking ahead, the coronavirus pandemic is going to continue to be the main driver for movement of both the Pound (GBP) and Euro (EUR).

Traders will be focused on the results from today’s meeting between Eurozone finance ministers. If ministers are able to reach an agreement on an EU-wide fiscal stimulus plan, the single currency will receive an upswing of support.