Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…
Latest currency news
The past couple of weeks have been marked by some notable volatility in currency markets, amidst growing concerns that we face a coronavirus resurgence.
During this time, we’ve seen GBP/EUR slump from 1.11 to 1.09 and back again.
Meanwhile, GBP/USD has plunged from 1.25 to 1.22, whilst EUR/USD has traded between $1.11 and $1.13.
What’s been happening?
Fresh coronavirus outbreaks in countries like China and Germany, as well as a startling spike in cases in the US, has rocked currency markets through the second half of June, amid fears of a second wave of infections.
This has been particularly damaging for the pound. The currency has had to content with Brexit concerns and the Bank of England’s announcement of more stimulus while growing increasingly sensitive to market sentiment.
Despite the rise in coronavirus cases setting back plans to reopen the US economy, the US dollar has actually strengthened over the last two weeks as second wave fears have kept the safe-haven currency in strong demand.
Meanwhile, the euro has fluctuated in recent weeks, with Europe’s solid progress towards eradicating the coronavirus being offset by the EU’s failure to reach an agreement on a recovery fund as well as the threat of a transatlantic trade war.
What do you need to look out for?
Looking ahead, it's likely the pound will remain on the back foot going forward so long as Brexit progress remains limited and the UK’s coronavirus figures remain elevated.
For EUR investors the focus at the start of July is whether EU leaders are able to agree on the terms of the coronavirus relief fund, with further delays likely to undermine the single currency.
Finally, with coronavirus concerns continuing to weigh on market sentiment it’s likely we will see the US dollar remain well supported over the coming weeks, although any gains could be tempered as political risks begin to grow.
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