Following the launch of our series of free webinars examining the various impacts of Covid-19 on international business, we’ve answered the questions raised in our first session below.
Question: “Do you have an office in Dubai?”
Answer: We have a WorldFirst UK Representative Office in the UAE. Please contact Adam Banks here for further enquiries.
Question: “Will Covid-19 affect the Brexit implementation period timing?”
Answer: At this stage, the UK government has stressed that there is no need for an extension but it’s worth noting that was said prior to Michel Barnier and Boris Johnson testing positive for Covid-19. The EU has stated they are happy to look into extending the implementation period. Given the evolving situation and impossible levels of unknown, the government is assuming they have the bandwidth and technology to continue the conversations and avoid delays. We can cover more of this interesting topic as it develops.
Question: “Is there a fixed date for the financial impact reporting of the Eurozone?”
Answer: Economic data will continue to be released across the Eurozone and the individual economies on a weekly and monthly basis. The financial impact will be demonstrated through the following key data releases:
- Employment vs Unemployment figures.
- Manufacturing and industrial output
- Household consumption
- Exports and imports
- National accounts
- Interest rates and inflation
Keep an eye out for these in our daily commentary emails.
Question: “Do we think we have hit the lowest point in the equities market or do you think the US and China Stimulus packages can help?”
Answer: I haven’t seen anyone brave enough to call the “bottom” of the market just yet but at the time of writing this email, US, UK and European equities are starting to retrace higher. The markets will be looking for positive headline news that shows both case numbers and mortality rates turning lower across the major economies. 
Question: “What is the outlook for developing countries, especially those which rely on crude oil? The Russia – Saudi drama doesn’t appear to be letting off.”
Answer: Good question. As we saw in the emerging market sector, there was a huge removal of funding from investments as money headed towards safe havens. If you look at how Italy was overrun in a short space of time despite having some of the most advanced hospitals in the world, you wonder how other countries will be prepared and what impact it will have on their economies over the long-term. 
Question: “Has USD strength peaked?”
Answer: The Dollar enjoyed some great currency strength from the 9th March onwards, but as the number of cases increased exponentially, coupled with the sheer scale and importance of the US within the global economy, we are now seeing Dollar weakness. USDJPY, EURUSD and GBPUSD which all enjoy the healthiest currency volume have taken advantage of this Dollar weakness, most notably GBPUSD which has recovered 10 cents in 7 days. 
Question: ” The UK Government says that we should expect 3-6 months of lockdown. How would the graphs change accordingly for worst-case and average impact scenarios?
Answer: It’s very tricky to answer accurately as the data modelling process is updating on a daily basis. Looking at how UK businesses have reacted to the change in demand and the strain on the “real economy” there are some businesses which are seeing record levels of sales and demand for their products and services. We will have to see how this is countered by other businesses and sectors that are under strain. It would be realistic to expect economic data to weaken but what is obvious to me is the overall reaction from both the Government and the Bank of England to protect industries and jobs. The UK has one of the most robust economies in the world and as such we must remain as upbeat as possible.
Question: “How did Boris Johnson getting the virus affect the markets?”
Answer: Both GBP and the FTSE100 showed initial signs of weakening, but compared with the overall trend it didn’t represent anything significant. If anything, it helped bring together the importance of self-isolation and reminded everyone that there aren’t any exceptions. 
Question: “I have a holiday home in Spain. How do you see the euro performing short term?”
Answer: As mentioned above, the Euro is likely to find itself under increasing economic pressure as it continues to battle against Covid-19 across a significant number of countries. When you add in the extended period of lockdown and the already faltering economic performance, it presents a bleak financial outlook.
Question: “What is the GBP/EUR trend next month and over the coming six months?”
Answer: The Euro saw a significant investment from traders and investors during the end of February and the beginning of March. Now that has cooled off, we’ve seen GBPEUR advance back to 1.12, representing a 7.5% increase. The economic outlook for both the UK and Europe remains highly uncertain, but the economic outlook for the Euro remains more challenged. 
Question: “Should I purchase a property during coronavirus because of the great price?”
Answer: Government changes have systematically paused the UK property market. Property prices are likely to drop, according to most residential property experts. This could present a great opportunity to buy, but only once it is safe to do so. 
Question: “Trump’s response to Covid-19 has been criticised and is perceived as such by sections of the US electorate. This can push Trump into volatile behaviour. What effect will Trump’s volatility have on markets and currencies. Or can it be stabilised by the Fed?”
Answer: As always, President Trump’s actions can certainly cause wobbles in the market, having his twitter feed close by during data releases has become somewhat of a must-have in the office! The latter part of your question is where the answer lies though – markets are far more focused on the words and actions of central bankers at press conferences, as they hold the economically critical responses, regardless of Trump’s comments from the side. For all of the President’s twitter attacks on the Fed and Jerome Powell, the central bank still sets its own policy – not the White House.
Missed the webinar? No problem! Catch up here.
All answers are provided by our in-house FX expert and webinar host, Alistair Hutson. Whilst every effort is made to ensure the information published here is accurate, you should confirm the latest exchange rates with WorldFirst prior to making a decision. The information published is general in nature only and does not consider your personal objectives, financial situation or particular needs. Full disclaimer available online.