THE POUND suffered a slump against the common currency overnight, but has remained mostly “rangebound”. With relaxed lockdown rules coming into action on Monday, will sterling regain some of its strength?
The pound to euro exchange rate has been stuck in “rangebound” conditions for the last week. Though sterling has lost some of its strength overnight, following the latest government coronavirus public address, it has kept its head above the 1.12 handle.
With no notable political developments in the eurozone for the rest of the week, it’s likely that the exchange rate will remain close to its current position.
However, with the UK economy slowly restarting thanks to a relaxation of lockdown measures, this could have an impact on rates in the coming weeks.
The pound is currently trading at a rate of 1.1170 against the euro according to Bloomberg at the time of writing.
He explained: “Sterling slid steadily lower against the common currency over the course of yesterday, though kept its head above the 1.12 handle, amid rather risk-averse trading conditions.
“Today, with no notable releases due from either side of the Channel, rangebound conditions are likely to prevail.”
At the end of last week, the pound suffered a blow following unsuccessful discussions between UK and EU leaders regarding a Brexit deal.
Coupled with the fallout of the coronavirus lockdown measures around the world, the pound was struggling to bounce back to a more comfortable position.
World Bank president David Malpass described the impact of the pandemic on the global economy as “a devastating blow”, both for businesses and personal lives.
Now, as countries begin to emerge from lockdown, there is some hope that the world economy can start the recovery process, and a more “normal” way of living can be rediscovered.
Last night Prime Minister Boris Johnson took to television screens in a live briefing from 10 Downing Street to announce the next steps towards relaxing lockdown in a safe and controlled way.
The Prime Minister announced the reopening of nonessential retail outlets from Monday, with new health and safety guidelines in place to ensure social distancing.
Some outdoor activities such as zoos and safari parks are also been given the green light to reopen.
The news follows the reopening of some take out food chains, with fast food restaurant McDonalds proving popular after reopening its drive-through. The chain is anticipated to reopen the inside of some of its restaurants in the coming weeks for food collection.
Churches and places of worship for individual prayer will also be reopened.
Chief medical officer, Chris Whitty, described the move as “a reasonable way to go at this point in time”, but warned: “Its not a risk-free one. There are no risk-free options.”
The government also announced that single households could join another in a “support bubble”, meaning that family, friends, and lovers could reunite once again
However, each household will only be allowed to form a “bubble” with one other household.
Members of the “bubble” may act as one household and even spend the night in one another’s homes.
“I know how difficult the past months have been for people cut off from their friends and family,” commented the prime minister. “There are still too many people, particularly those who live by themselves, who are lonely and struggling with being unable to see friends and family.
“So, from this weekend, we will allow single adult households – adults living alone, or single parents with children under 18 – to form a support bubble with one other household.
“All those in a support bundle will be able to act as if they live in the same house, meaning they can spend time together inside each others homes and do not need to stay two meters apart.”
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