2020 currency review

Philip McHugh December 31st 2020 - 2 minute read

When 2020 dawned the world was a very different place to the one we’ve come to know now, with the coronavirus pandemic creating a year like no other.

Covid-19 was the driving force of much of the currency movement we’ve seen over the last 12 months and inspired some pretty dramatic shifts in exchange rates.

2020’s key exchange rates


  • GBP/EUR – 1.20
  • GBP/USD – 1.36
  • EUR/GBP – 0.94
  • EUR/USD – 1.23


  • GBP/EUR – 1.06
  • GBP/USD – 1.14
  • EUR/GBP – 0.83
  • EUR/USD – 1.06

*Please note the rates quoted are interbank. Get in touch or log in to your online account to check live rates. 

What happened in 2020?

The pound was probably the strongest performer at start of 2020, with the currency still riding high on the euphoria following Boris Johnson’s landslide win in the 2019 general election.

Sterling was supported by hopes that Johnson’s massive majority would aid the UK government when it came to pursuing a Brexit trade deal with the EU.

However, priorities quickly shifted over the next couple of months as the coronavirus evolved from a localized epidemic to a global pandemic.

As a growing number of countries went into lockdown we witnessed perhaps one of the most volatile months in currency market history.

Driven by both a flight to safety as well as liquidity fears surrounding the world’s reserve currency, skittish investors flocked to the US dollar throughout March.

While most currencies suffered during this period the Sterling sell-off proved to be particularly dramatic.
Currencies began to stabilise towards the end of March, and as the world began to emerge from lockdown at the start of summer the US dollar’s bullish run came to a close.

The euro came into its own through the third quarter, with a strong rebound in growth and the announcement of a €750bn coronavirus relief fund from the EU catapulting the single currency higher.

The Pound also ticked higher during the summer in response to the UK’s sharp rebound in economic activity and some Brexit optimism.

However, as the days got shorter and temperatures fell it became increasingly clear that the coronavirus was anything but beaten and a second wave of infections began to sweep across much of the world.

Concerns over the second wave were tempered somewhat by the announcement of multiple coronavirus vaccines, which offered investors some light at the end of the tunnel.

Other events started to drive currency market movement in the final quarter of 2020, including the US Presidential Election and the to-the-wire Brexit trade deal.

2021 and exchange rates

With the UK no longer facing a no-deal Brexit the pound could see a lot more upside potential at the start of 2021 than it otherwise may have done.

That being said, with the threat of another lockdown looming, there may still be some dark days ahead for Sterling.

2021 will also mark the start of Joe Biden’s Presidency and the end of what is set to be Angela Merkel’s last term as German Chancellor after a decade and a half at the helm of Europe's largest economy. The prospect of life after Merkel will prove unsettling to many EUR investors, and we could see the euro face some pressure as a result.

Written by
Philip McHugh

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