GBP/EUR Bounces Back After Touching Monthly Low

GBP/EUR is in bullish mood on Tuesday, after touching the lowest level in over a month yesterday. The pair is currently trading at 1.1683, up 0.18% as of 9:35 AM UTC.

Markets in the UK, France, and Spain are closing early on Christmas Eve, while German, Italian, and Swiss markets are closed all day.

The pound’s rebound might be driven by technical analysis reasons amid a lack of relevant fundamentals. The pair has lost about 2.80% after the post-election rally, having one of its worst weeks in years. At the moment, investors might be taking a pause to continue the bearish stance on fresh worries about a potential no-deal Brexit. UK Prime Minister Boris Johnson surprised economists when he voiced his intentions to rule out any attempt to extend the Brexit transition deadline beyond December 2020.

The pair is currently advancing also because investors are reevaluating the European Central Bank’s (ECB) aggressive stimulus measures. The ECB’s interest rates might keep at a record low for years, but this approach might become counterproductive, according to Klass Knot, an ECB governing council member. He told Dutch newspaper De Volkskrant:

I do not have a crystal ball, but I cannot rule out that the current low interest rate environment could last another five years.”

“This worries me, because temporarily low interest rates are something quite different from persistently low interest rates,” he added.

Knot, who is president of the Dutch central bank, has repeatedly criticized the ECB’s easing policies. He said that the current low rates might push investors to take excessive and unnecessary risk, while younger generations might feel forced to boost their savings. This is not desirable from a macro-economic viewpoint, the official noted. He added:

And it is also an example of how our low interest rate policy may eventually shoot itself in the foot. If people start saving more in response to the low interest rates, this will add further downward pressure on inflation.”

The next support level for GBP/EUR is 1.1617. If the pair breaks it, then it might decline below the psychological level of 1.1600. 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.