The pound rose to a one-week high against the euro after a week of struggling in “rangebound” restrictions. As businesses continue to reopen across the UK, there seems to be some optimism for the pound, however, the threat of a second coronavirus wave in Europe looms.
Sterling is currently trading at a rate of 1.1014 against the euro according to Bloomberg at the time of writing.
Michael Brown, currency expert at Caxton FX spoke exclusively with Express.co.uk to share his insight into the current rates.
“Sterling rose to a one-week high against the common currency yesterday, as the euro took a pause for breath after the recent recovery fund-fuelled optimism, though €1.1050 remains a tough nut to crack for the pair,” he explained.
“Looking ahead, a relatively quiet calendar awaits, and with focus on the Federal Open Market Committee (FOMC) decision this evening, a rather rangebound day may be in store.”
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The Federal Open Market Committee, a committee within the Federal Reserve System, will meet later today to debate the rate path for the US dollar.
Undoubtedly this will affect how traders react in the following hours, and ultimately presents a chance to shake up global currency positions.
Though the pound is currently attempting to claw back some strength against the euro, it still remains around the €1.10 mark.
George Vessey, UK currency strategist, Western Union Business Solutions said: GBP/EUR remains anchored below €1.10 due to the stronger Euro. At the time of writing, this currency pair is 0.6 percent lower in July and over seven percent lower year-to-date.”
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While most UK businesses have welcomed back customers and clients, including gyms and tattoo parlours this week, the threat of a second wave of the pandemic in Europe looms over UK shores.
In a bid to stop further infection being transported into the UK, the Foreign and Commonwealth Office (FCO) made the decision to put a stop to travel between the UK and Spain.
Following a sudden surge of cases in Spain, the FCO issued an urgent travel advisory against all but essential travel to the country, despite thousands of Britons having just jetted off on summer holidays.
The FCO states: “From 27 July, the FCO advise against all non-essential travel to Spain, including the Balearic and Canary Islands, based on the current assessment of COVID-19 risks in the country.
“This advice is based on evidence of increases in cases of COVID-19 in several regions, but particularly in Aragon, Navarra and Catalonia (which include the cities of Zaragoza, Pamplona and Barcelona).
“The FCO is not advising those already travelling in Spain to leave at this time.
“Travellers should follow the advice of the local authorities on how best to protect themselves and others, including any measures that they bring in to control the virus.
“If you are returning from Spain you will be required to self-isolate on your return to the UK, but the FCO is not advising you to cut short your visit. You should contact your tour operator or airline if you have any questions about your return journey.”
Though the government received some criticism for its sudden U-turn, Sam Clarke MP, Minister for Regional Growth and Local Government defended the move.
Speaking on BBC News he said: “The situation changed incredibly quickly, we got the data on Thursday and Friday about the 75 percent increase in cases relative to the middle of the week and we acted on Saturday,” he explained.
“I don’t think that there could have been a much prompter turnaround.
“Obviously we have to respond to the data, it is near to real-time as we can to avoid risk being imported into the country.”
Despite the changes to Spain, travel to many other countries on the UK’s “safe” travel corridor list remains.
For Britons with European holidays booked in the coming weeks, the key is to keep an eye on relevant updates and shop around for the best rates.
The Post Office is currently offering 1.0556 for amounts of £400 or more, and 1.0764 for amounts of £1,000 or more.