Even the global currency market is feeling the impacts of rising coronavirus concerns. Numerous major currencies have dropped in the past weeks, and we even saw the stock markets reach their lowest levels since the 2008 crash.
The general trend seems to be that virus panic has impacted the markets globally. As Coronavirus-related risk aversion is set to continue, let’s take a look at how this could affect your upcoming transfers.
The Pound is under pressure
The increasing number of Coronavirus cases and the start of the Brexit trade negotiations have led to a weaker Pound.
The Bank of England also made an emergency move to cut interest rates to 0.25% yesterday which initially saw a sharp fall in the Pound. This seems to be a continued theme globally as other countries have taken similar action. The government also pledged £30bn in yesterday's budget to get the country through the coronavirus outbreak.
On the 12th March, the government also announced a move to the next stage in its response to the virus, the 'delay' stage. Meanwhile, Ireland has officially announced school closures and limitations on mass gatherings.
These are all contributing factors that could have a significant impact on the economy and the Pound. Keep an eye on the markets if you’re particularly sensitive to currency movements, as volatility could continue.
The US Dollar rises and falls
Initially, the coronavirus had a positive impact on the Dollar, with the currency up about 2% since the first cases. However, the Federal Reserve held an emergency meeting for the first time since the 2008 financial crisis. The decision to cut interest rates caused a sharp fall for the Dollar.
Will the Fed cut rates again on March 18th at their next meeting? The odds are now over 70%. If this is the case, then the Dollar could take another big fall.
We also saw Trump halt travel from Europe to the US, however the UK and Ireland are not included.
As the situation develops, we continue to see the stock markets struggle. Whilst not directly related to the currency market, uncertainty could affect global currencies.
The Canadian Dollar takes a tumble
Because Canada is so reliant on US trade, any impact on the US economy will in turn impact Canada. The central bank followed the Fed and cut rates by 0.5%, causing the currency to weaken accordingly.
The Australian Dollar takes a hit and makes a climb
The Australian Dollar fell significantly in January and February after the first case of the new coronavirus strain was made apparent. Since then, the Aussie Dollar has made some recovery.
The New Zealand Dollar falls and rises
The New Zealand Dollar experienced very similar activity to the Australian Dollar. Keep an eye on these currencies – both the Australian Dollar and New Zealand Dollar will be the most affected currencies when it comes to coronavirus uncertainty.
What does this mean for me?
Make sure to keep your eyes on the news to hear the latest updates. As uncertainty continues to grow, we could see the global currency markets fall as a result.
Could now be a good time to consider your international money transfers? Log in to your account to check the rates and see how your currency is doing now.
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