The pound to euro exchange rate plummeted to a fresh six month low against the euro yesterday as the coronavirus pandemic pushed businesses worldwide to begin closing their doors. The outbreak is now at the fore for market traders, who would usually be turning to the labour market report.
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The pound is currently trading at a rate of 1.0948 against the euro, according to Bloomberg at the time of writing.
Uncertainty surrounding coronavirus and what its impact on the global economy could be has pushed the pound below the 1.0 mark for the first time in half a year.
Recent months have seen the UK’s departure from the EU cause some turbulence, with rapid falls becoming frequent, but COVID-19 has brought fresh concerns to the market.
Speaking to Express.co.uk, Michael Brown, Currency Expert at Caxton FX said: “Sterling slid to fresh six-month lows against the common currency on Monday, dipping below the 1.10 handle, as market participants priced in the coronavirus taking a greater toll on the UK economy after PM Johnson announced a series of more stringent ‘virus control’ measures.
“Today, the aforementioned epidemic will remain in focus, with this morning’s January labour market report set to be ignored.”
It comes as countries worldwide impose travel bans and close borders.
Meanwhile a number of global airlines have begun to pull the plug on their usual flight itinerary.
At a press conference last night Prime Minister Boris Johnson urged Britons to avoid “unnecessary travel” in what he describes as “draconian” measures to tackle the spread of the virus.
Admitting the Government was demanding “a very substantial change in the way that we want people to live their lives”, and the Prime Minister said: “I can’t remember anything like it in my lifetime. I don’t think there has been anything like it in peacetime.
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“We have to accept that it’s a very considerable, psychological behavioural change that we are asking the public, the nation to do. But I’ve absolutely no doubt we can do it together.”
Airlines including Ryanair, Jet2, British Airways and easyJet began to ground flights.
A statement from easyJet said: “Due to the unprecedented level of travel restrictions being imposed by governments in response to the coronavirus pandemic and significantly reduced levels of customer demand, easyJet has undertaken further significant cancellations.”
However, despite the cancellations, there will still be Britons who are searching for exchange rates.
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The Post Office is offering €1.0676 for amounts over £400, €1.0831 for amounts beyond £500 or €1.0887 for £1,000 or more.
Jeremy Thomson-Cook, Chief Economist at Equals (formerly known as FairFX), said: “The global emergency of coronavirus and its knock on impact for trade raises questions over the impact on currency for both consumers looking towards spring and summer trips abroad and businesses trading oversees.”
Meanwhile, Ian Strafford-Taylor, CEO of international travel money specialist Equals, added: “The global pandemic of the coronavirus along with the government’s response and the market’s reaction has left the pound incredibly vulnerable.
“Combined with travel bans, country lockdowns and mass flight cancellations, holidaymakers are struggling to know which way to turn.
“People who have had to postpone their holiday or had their trip cancelled, could hold onto their travel money until they are able to rebook, or if it’s loaded onto a prepaid card, they could use it while on home soil.
“It’s a very uncertain time for the pound, so if you do need to change your travel money back into pounds, you should shop around to find the best buy-back rate.”
Those with cancelled holiday plans should speak directly with their airline or tour provider.
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