The euro is still performing well against the pound, with demand for currency safe-havens slowing down as the markets await with bated breath for further news on the coranvirus, originating from the Wuhan province in China. The virus has reportedly spread to Europe, with many countries including the UK issuing warnings to citizens to not travel to China except in extreme circumstances. The economic impact of the virus is not yet known.
Some positive news on consumer confidence in Germany continues the euro’s rollercoaster, and we will have to wait until later today to see what happens to both sterling and the euro after the Bank of England’s announcement on interest rates.
What Could Happen If the Rates Are Cut?
If the Bank of England announces at midday today that it has decided to cut rates, the euro could make gains against the pound. However, given there is a 50% chance that the Monetary Policy Committee will cut rates, it might not be a clear cut as usual.
We will have to wait until midday to see what happens with rates, but it’s almost as important to look at the narrative that comes alongside the decision.
The focus will then shift to upcoming Brexit negotiations. The UK will be leaving the EU on 31st January, however, all legislation will remain the same as the country enters the transition period.
For more GBP/EUR news or if you have a currency requirement you can get in touch with me, Tom Holian, directly at email@example.com, or call +44 (0) 1494 360 899 to discuss these factors in more detail.