The pound has experienced another turbulent week so far after experiencing both highs and lows. The pound managed to lose ground on the euro yesterday after the euro experienced a welcome boost brought on by the EU’s fund agreement. The pound is currently trading at 1.0999 against the euro, according to Bloomberg at the time of writing.
- Pound to euro exchange rate: Sterling remains ‘modestly higher’
This is below yesterday’s rate of 1.1086.
Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures this morning.
He said: “Sterling notched a second straight day of losses against the euro yesterday, again dipping below the 1.10 handle, as the common currency remained well-bid after EU leaders agreed on the recovery fund package in the early hours of Tuesday morning.
“Today, the pound is once again likely to take its cue from shifts in risk sentiment, with rising Sino-US tensions and tit-for-tat consulate closures potentially pressuring high-beta assets.”
Today, investors will be keeping an eye on escalating China-US relations which spiked yesterday after the Trump administration decided to close a Chinese consulate in Houston.
A Republican senator claimed that the Texas consulate was an “espionage hub”.
China was outraged by the move and has threatened to retaliate.
The Chinese foreign ministry spokesman Wang Wenbin said at a news briefing: “China strongly condemns such an outrageous and unjustified move, which will sabotage China-US relations.”
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“We urge the US to immediately withdraw its erroneous decision, otherwise China will make legitimate and necessary reactions.”
George Vessey, UK Currency Strategist from Western Union Business Solutions explained that the euro experienced a surge yesterday.
He said: “Despite the Euro failing to originally jump on the news of the EU recovery fund being agreed, the common currency staged a late surge yesterday afternoon, which hoisted the most traded currency pair in the world – EUR/USD – to levels last traded in January 2019.
“The agreed stimulus package is a clear sign of harmony amongst EU states amid the wave of Euroscepticism and Brexit that has haunted the bloc for years.
“EUR/USD rallied to $1.1547 in the early hours of this morning, a new 2020 high, with eyes on a run towards $1.1570 – the peak in January 2019.
“A close back below the $1.14 handle would undermine the bullish momentum but with five weeks of successive gains in the making, it looks like the Euro has the wind in its sails.
GBP/EUR has been pressured back towards the €1.10 handle due to the strength of the Euro, having enjoyed a spell above €1.11 earlier yesterday thanks to the risk-on rally.
“The 4-month downtrend remains firmly intact with €1.0760 a potential downside target for traders this summer.”
Now that travel abroad is back on the cards for some Britons, the exchange rate has become even more important for those looking to get away.
The Post Office is currently offering a pound to euro exchange rate of 1.0556 for amounts over £400.
The exchange rate then improves if you spend more.
The rate increases to 1.0710 for over £500 and 1.0765 for over £1000.
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