Pound to euro exchange rate: GBP ‘gains ground’ despite ‘worrying’ COVID-19 resurgence

The pound to euro exchange rate “gained ground” after being supported by “month-end flows”. Recently, concerns surrounding a second wave of coronavirus across Europe have forced the UK to axe it’s quarantine-free travel rule for Spain. This means that anyone travelling from Spain to the UK now faces two weeks in isolation.

Although the new restrictions have outraged Britons, many still have holidays abroad and travel money on their minds.

But with a rapid spike of cases across many countries in Europe including Italy, Belgium, France and Croatia, more destinations could also be axed from the UK’s “air bridge” list.

The pound is currently trading at a rate of 1.1045 according to Bloomberg at the time of writing.

This is an improvement on yesterday’s rate of 1.1019.

However, that 1.11 handle continues to be a major milestone for sterling.

Speaking exclusively to Express.co.uk, Michael Brown, currency expert at Caxton FX explained his take on the current rates.

He said: “Sterling gained some modest ground against the euro yesterday, being supported by chunky month-end flows, though this was not enough to help the pair break through the 1.11 handle, which continues to act as stiff resistance.

“Looking ahead, a host of eurozone releases – including GDP and CPI – are due this morning, though the market will likely continue to focus on rather worrying signs of a resurgence in COVID cases across the continent.”

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Health Secretary Matt Hancock said yesterday that he is concerned about a second wave and that the UK will not hesitate to act.

The Health Secretary said: “I am worried about a second wave.

“You can see a second wave starting to roll across Europe and we’ve got to do everything we can to prevent it from reaching these shores and tackle it.”

He added: “We’re taking action and we will take action if it is needed to keep this country safe.”

Ranko Berich, Head of Market Analysis at Monex Europe said that the pound has also been fluctuating against the US dollar in recent weeks.

He said: “Over the past few weeks, the dollar has taken the kind of shellacking normally reserved for pound sterling during a particularly bad bout of Brexit angst, as the costs of the US second wave have become clear.

“Recent FOMC messaging has made it clear that should the recovery stall, options such as more asset purchases and enhanced forward will be used aggressively.

“The net effect of these measures will be a flatter, lower US yield curve.

“As a result, the greenback will look less exceptional compared to its peers and is likely to continue to slide as high dollar exchange rates driven up by years of rate differentials and haven flows become harder to sustain.”

The Post Office Travel Money is currently offering 1.0621 for amounts of £400 or more and 1.0831 for amounts of £1,000 or more.

These are an improvement on yesterday’s rates.

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