The Pound plunged versus the Euro in the previous session as the UK prepared for lock down. The Pound versus Euro exchange rate tumble, hitting a nadir of €1.0649 before closing 0.9% lower at €1.0771. Despite the steep fall, the Pound stayed above last week’s 11 year low of €1.0523.

Today, at 06:30 UTC, GBP/EUR is trading +0.2% at €1.087 as investors look cautiously ahead to PMI readings from both the eurozone and the UK.

Pound Rebounds As Britain Locks Down

Last night Prime Minister Boris Johnson announced a lock down in UK. In the biggest ever restriction on public freedom, Boris Johnson bans people from leaving home except for food, medical treatment and daily exercise. The move effectively paralyses the UK economy. The Pound had been expecting the move, declining sharply across Monday.

Investors will now look towards the release of the manufacturing and service sector PMI’s. Analysts are expecting the figures to show the initial impact of coronavirus on the UK economy. Analysts are forecasting activity in the manufacturing sector will slump to 45 in March, down from 51.7 in February.  The service sector, the dominant sector in the UK economy is expected to slump from 53.2 last month to 45. The figure 50 separates expansion from contraction.

Just as the UK economy was getting back on its feet after the decisive Conservative election in December following persistent Brexit uncertainty.

Eurozone Paves Way For Increased Fiscal Spending

The euro pushed higher on Monday despite Eurozone consumer confidence hitting a 5 year low. According to data from the European Commission consumer morale plummeted in March, giving the first glimpse of the economic impact that the measure to stop the spread of coronavirus are having.

The consumer confidence indicator fell a record 5 points to -11.6, its lowest level since 2014 and well below its long-term average. Consumers are fearful that they will lose their jobs after lock downs imposed by Italian, Spanish, French and German governments.

Euro investors are also reacting to the news the Eurozone finance ministers have agreed to activate the escape clause of the EU fiscal framework, for the first time. This means that countries are now allowed to temporarily deviate from the regular fiscal rules. Together with the previously announced ECB’s Pandemic Emergency Purchase Programme (PEPP), it paves the way for significant fiscal spending by national governments.

Investors will now turn to Eurozone PPMI data, which is expected to show a significant drop in activity. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. ("We", "Us"), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.