- GBP advances as Boris Johnson announced three-stage plan to ease lockdown measures
- UK government, expected to extend the job retention scheme until September
- Germany’s infection rate has risen above 1 after the lockdown was eased
- GBP/EUR is trading +0.1% at €1.1464 at 06:30 UTC. Real time exchange rates
Boris Johnson’s easing of lockdown measures is lifting the Pound versus Euro at the start of the new week, with the pair extending gains from the previous week.
The Pound Euro exchange rallied 0.5% last week, closing on Friday at €1.1447, slightly off the weekly high of €1.1509 reached early on in the previous week.
At, 06:30 UTC, GBP/EUR is trading +0.1% at €1.1464 as investors digest UK Prime Minister Boris Johnson’s plans to get Britain back to work and as the European Commission risks an institutional showdown over Germany’s constitutional court verdict against the European Central Bank.
GBP: Job Retention Scheme Also To Be Extended
The Pound is advancing after Boris Johnson outlined plans to get the British economy moving again by very gradually easing restrictive lockdown measures which have paralysed the British economy across 7 weeks.
Boris Johnson announced that people could exercise outside more frequently and perhaps most importantly encouraged those who haven’t be able to work from home to return to work. This should be that construction and manufacturing sectors will be reopening over the coming week.
The government is also expected to extend the job retention scheme until September, at the reduced rate of 60%. The hugely popular furlough scheme will also top up the pay packets of those brought back part time, offering additional support to workers and the UK economy.
The UK economic calendar is light today. Investors will shift their gaze towards week long Brexit talks which begin today.
EUR: EU To Challenge Germany’s Court Verdict vs ECB?
The Euro is starting the week off on the back foot after the European Commission threatened twice in one weekend to sue Germany over a ruling by its constitutional court challenging the ECB’s quantitative easing programme.
The prospects of an institutional showdown in Europe are rising just as the region is heading towards its deepest recession in a 100 years.
Looking ahead investors will remain focused on the reopening of economies across Europe. Germany’s infection rate has risen above 1 after the lockdown was eased. Fears are growing that Germany might have started to open up its economy too soon and a second wave of infections could be imminent. These fears and the prospect of a return to stricter lockdown is dragging on the common currency.
