The pound saw a modest boost against the euro yesterday with traders a little more optimistic about the risk-tone gap. Prime Minister Boris Johnson also returned to work, providing a small yet positive contribution to the GBP.
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However, his comments regarding the continuation did little to benefit the pound, with the common currency continuing to gain some strength as most of Europe begins to phase out of lockdown and attempt to restart their economies.
For the most part, changes to the rates were minor, with no clear answers as to when the pandemic will be beaten.
The pound is currently trading at a rate of 1.1475 according to Bloomberg at the time of writing.
Michael Brown, Currency Expert at Caxton FX, spoke with Express.co.uk to explain the key factors affecting the exchange rates.
“Sterling gained ground against the common currency yesterday, benefitting from the broader risk-on tone to gap higher at the Asia open before consolidating that advance throughout the day,” he said,
“The pound was largely unfazed by PM Johnson’s comments which dampened some expectations of an immediate lifting of the lockdown.
“Today, with the data calendar light, the coronavirus pandemic will remain in focus, with another day of firm sentiment set to see sterling remain well-supported.”
This morning France’s government revealed its plans to begin lifting lockdown across the country, following in the footsteps of Italy and Spain.
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Denmark and Norway have also both kick-started their economy with a slow relaxation of its lockdown regulations.
It is hoped that these initial changes will help test out the landscape for normal life to resume as soon as it is safe.
France’s President Emanuel Macron has suggested that schools will be some of the first to open when lockdown lifts on May 11 .
Though restaurants and cafes will remain closed initially, if science suggests the number of confirmed cases is dropping, they could follow.
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Meanwhile in Spain children under 14 are being allowed to play outside for one hour a day, and in Italy, the Prime Minister told local newspaper La Repubblica that manufacturing could be restarted as early as May 4, but that schools will remain closed until September.
In the UK, relaxation is not in sight.
Appearing for the first time since contracting COVID-19 Prime Minister Boris Johnson addressed the nation and expressed the need to remain in lockdown.
His comments did little to benefit the GBP.
He explained that Britain is now “passing through the peak” and that is “how we are now beginning to turn the tide.”
Though restrictions are lifting somewhere, it is becoming clear that any rapidly approaching holiday dates are unlikely to go ahead.
Numerous airlines, hotels, and holiday providers are cancelling trips and kick-starting the refund process for holidaymakers.
Is now the time to change your holiday money back into pounds?
Many experts recommend avoiding changing holiday money at this time.
This is largely to do with the limited number of bureau de changes open at the moment, making it harder to shop for the best deals.
Ian Strafford-Taylor, CEO of Equals (formerly known as FairFX), advised customers to hang onto any leftover euros.
“If they can, holidaymakers might want to keep hold of their currency until their next trip and use it then,” he said.
“For those using prepaid currency cards, they can spend their money back in the UK online or in stores, keep it for their next trip, or change it to a different currency altogether.”
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