The euro started the week relatively well as investors considered it might be a safe haven, but retreated as the days passed. EU finance ministers pledged to take action, but the meeting did not yield any concrete steps and the market is already weary of empty promises.

One option would be to make use of the European Stability Mechanism’s €410 billion firefighting fund but to do so in a major way would require ratification by national parliaments. While most economic statistics are being ignored during the crisis, the market did take notice of the dramatic drop of economic sentiment in Germany and across Europe to -49.5, the lowest level in eight years and the euro made further losses against the US dollar. The European Central Bank announced another €750 billion of asset purchases – the “Pandemic Emergency Purchase Programme” may counter some of the concerns that the ECB was failing to take action but as with all fiscal and economic measures at the moment, the spread of the virus is the number one priority for all and the currency’s fate lies in whether the current travel bans, shut downs and social distancing measures have the desired effect.

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