The British pound is higher against the euro on Tuesday.
Movements in the pound were well synchronised across multiple currency pairs as investors reacted to the news that PM Boris Johnson had been hospitalised but that it was precautionary on the advice of doctors.
News that several European nations are making plans for rolling back forced-lockdowns was mostly a positive force on the euro but not enough so to push it higher against the pound.
GBP/EUR was higher by 42 pips (+2.17%) to 1.1624 with a daily range of 1.1293 to 1.1409 as of 3pm GMT.
The currency pair hit daily lows at 1.13 before rebounding and finding resistance at 1.14, trading in a narrow range thereafter. Last week the exchange rate rose +1.46%.
British pound recovers after jolt lower when PM hospitalised
A more optimistic tone across financial markets helped the British pound recover early losses on the news that the British Prime Minister Boris Johnson had been hospitalised because of his COVID-19 symptoms. The hospital visit was said to be just precautionary but nonetheless raised question about a loss of leadership while he is out of action.
Investors have been taking their cues from the words and actions of national governments in response to the “flattening curve” of news infections. That some governments, including France and Spain were looking at Easter as a possible time to ease back lockdown restrictions was seen favourably for risk assets like the pound.
Euro unable to capitalise on flattening curves
The euro has been on the losing end of a strong dollar, not aided by concerns about the lack of Europe-wide fiscal response to the coronavirus. Wrangling across predominately Northern versus Southern European governments about the joint issuance of debt is weighing on the single currency.
Across European stock markets the mood looked better amid signs that infection rates could be peaking in some of the worst hit countries. South Korea reported 47 new cases, its lowest in six weeks while in France, the number of people on intensive care because of the coronavirus has been falling and in the US, Vice President Pence said he saw “glimmers of progress” from the number of cases across America.
