SendMoney.org.uk

Compare exchange rates, send money abroad and online

Tue 19 Mar 2024 05:24GMT

Italy’s Debt Crisis Weighs on Euro

Published: 18 May at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Italy,

Pound (GBP)


The Pound (GBP) began to push higher today after UK Health Secretary Matt Hancock revealed that everyone over five – with Covid-19 symptoms was now eligible for a coronavirus test. Mr Hancock also added that 21,000 people had been hired to carry out contract tracing tests.

As a result, Sterling benefited from what appears to be increasing steps to tackle the UK’s coronavirus crisis.

However, the Bank of England’s (BoE) increasing talks of taking the interest rates down below zero have left some Sterling traders feeling anxious about Britain’s economy going forward.

Euro (EUR)


The Euro (EUR) has suffered from rising fears over Italy’s debt crisis. Ever since the beginning of the coronavirus pandemic Italy’s debts have soared, further threatening unity into the already sensitive Eurozone.

Italy’s debt management chief David Iacovoni, however, was more confident, saying:

‘The underlying structure of our public finances are under control, now we are tackling this emergency situation but immediately afterwards the government will be committed to a debt reduction strategy.’

Nevertheless, with the Eurozone coming under increasing strain from the economic fall out from the coronavirus pandemic, market appetite for the single currency has continued to slide.

US Dollar (USD)


The US Dollar (USD) put in a weaker performance today as investors flocked to riskier assets. With Asian markets and the Eurozone reopening its economy and easing lockdown restrictions, investors have become increasingly optimistic that the global economy could recover sooner-than-expected.

Meanwhile, the Federal Reserve Chairman Jerome Powell has warned that the economic downturn of the coronavirus could last until ‘late 2021’.

The ‘Greenback’ has also had its safe-haven gains held back by growing hopes for a Covid-19 vaccine. This follows news that several biotech companies had secured positive results on vaccine trials.

Canadian Dollar (CAD)


The Canadian Dollar (CAD) benefited from a surge in oil prices to a 2-month high on renewed hopes of increasing demand. With large economies reopening worldwide, there’s growing expectation that oil demand will correspondingly increase.

Oil is one of Canada’s largest commodities, so if oil prices continue to increase this week, we could see the Canadian Dollar continue to edge higher.

Australian Dollar (AUD)


The Australian Dollar (AUD) also benefited from risk-on market mood today as the Eurozone and Asian economies continue to ramp up their economies.

However, growing tensions between the US and China have plagued the ‘Aussie’ today. Any further signs of relations between the two superpowers deteriorating would prove AUD-negative.

New Zealand Dollar (NZD)


The New Zealand Dollar (NZD) has similarly struggled over fears of souring relations between the world’s two largest economies today.

However, NZ President Arden’s claims of a coronavirus-free New Zealand have benefited the New Zealand Dollar.

Sharon Zollner, the Chief Economist at ANZ Bank New Zealand, commented:

‘Unlike most of the world, because of the success of our lockdown we now have a shot at just a regular horrible recession. That is actually something to celebrate. There is a cautious optimism in New Zealand that we know what we’re dealing with now.’
As of Monday, 18th May 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1176, GBP USD exchange rate was 1.2201, GBP AUD exchange rate was 1.87, GBP NZD exchange rate was 2.0186, GBP CAD exchange rate was 1.7008, and GBP CNY exchange rate was 8.6748.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

Live Exchange Rates