The British pound is flat against the euro on Friday.
The euro was little changed as a prominent ECB central banker said the bank was watching to see if existing measures were enough.
The spectre of a no deal Brexit but also a round of profit-taking after two weeks of gains was hanging over the pound.
Pound versus Euro was down by 5 pips (-0.04%) to 1.1487 as of 3pm GMT.
GBP/EUR has found an interim top at 1.15 and failed three times on Friday to make significant progress beyond the level and edged to just below breakeven by the afternoon.
British pound can’t keep up with equity rally
The pound gained early on alongside stock markets but quickly found a top and turned sideways. Shares were led higher by Gilead Sciences after news of a breakthrough in the testing of its drug Remdesivir to treat the coronavirus.
The main pull on the pound appears to be re-emerging Brexit fears. There has not been a big sell-off by any stretch but currency has taken a pause.
Euro flat as Weidmann dismisses direct ECB lending
The euro was stable on Friday as more countries announced various levels of ‘re-opening’ of economies. From 20 April onward, Denmark will allow certain small businesses including hairdressers, beauty salons and driving schools to reopen.
Investors are watching the trajectory of new cases after economies are reopened. Spain eased some restrictions at the start of the week but by Friday, it reported 5,252 new coronavirus cases over the past 24 hours, the highest in a week. Confidence in both the euro and wider markets will be rattled if lockdown restrictions need to be tightened again.
European Central Bank (ECB) member and Bundesbank chief Jens Weidmann said on Friday that it was too early to say if current measures from the ECB will be enough, implying the ECB might do more if needed. The comments had the same kind of muted reaction seen yesterday to ECB President Lagarde. It’s understood that the ECB has limited ammunition to ease further so is only likely to do so should the situation deteriorate markedly.
