GBP/EUR Exchange Rate Slips as Coronavirus Remains in Focus
The Pound to Euro (GBP/EUR) exchange rate is trending lower this morning as the pairing continues to find its direction from coronavirus headlines.
At the time of writing the GBP/EUR exchange rate is trading at around €1.0933, down roughly 0.5% from this morning’s opening levels.
Pound (GBP) Supported by Huge Stimulus Announcement
Despite a clear bearish trend in the Pound (GBP) developing over the past couple of weeks, Sterling has been able to temper its losses against the Euro (EUR) this morning, following the UK government’s announcement of a £330bn coronavirus stimulus package.
In a press conference on Tuesday, Chancellor Rishi Sunak unveiled a series of financial measures aimed at limiting the economic impact of the coronavirus.
This includes the £330bn in loans, a temporary halt to business rates and help for retailers and pubs who have been worst hit by Boris Johnson’s urging people to practice social distancing.
In announcing the massive stimulus package, which accounts for about 15% of the UK’s GDP the Chancellor said the UK is facing an ‘economic emergency’, adding that ‘never in peacetime have we faced an economic fight like this one’.
‘I want to reassure every British citizen this government will give you all the tools you need to get through this.
‘That means any business who needs access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government-backed loan or credit on attractive terms.’
Sunack also pledged to go even further, if this package is not enough. Adding:
‘And if demand is greater than the initial £330bn I’m making available today, I will go further and provide as much capacity as required. I said whatever it takes, and I meant it.’
The stimulus packages came as a relief to GBP investors, but it still remains to be seen whether the measures will be enough given the speed at which the coronavirus crisis is developing.
Euro (EUR) Steady as EU Closes its Borders
Meanwhile, the Euro (EUR) is under scrutiny today as the EU takes the unprecedented step of sealing its borders from all travellers from outside the bloc.
From today any non-EU national will be barred from entering the bloc unless they are long-term residents, family members of EU nationals and diplomats, cross-border and healthcare workers, or people transporting goods.
Europe has been hit hard by the outbreak of the coronavirus and EU leaders are taking extraordinary steps to try and halt the spread of the disease, with most major European countries now in quarantine.
GBP/EUR Exchange Rate Forecast: Coronavirus to Drive Sterling Towards €1.08?
Looking ahead, the Pound to Euro (GBP/EUR) exchange rate looks set to extend its losses over the coming days as anxiety over the coronavirus continues to sap Sterling sentiment.
Expect to see the GBP/EUR exchange rate test the waters at €1.08 if the bearish trend in GBP continues unabated.