The British pound is lower against the euro on Monday.
Confusion about the next phase of Britain’s lockdown coupled with some anxiety before another week of Brexit talks weighed on Sterling.
The euro managed to edge out some gains over the pound but was softer against the dollar as markets expressed concern over a rise in coronavirus cases in Germany.
The pound versus euro was down by 37 pips (+0.31%) to 1.1408 as of 3pm GMT.
After consolidating neat 1.145 overnight, GBP/EUR was dumped down nearly 100 pips toward 1.135 before recovering the 1.14 handle.
GBP: Uncertainty over lockdown strategy
UK Prime Minister Boris Johnson’s updated strategy for dealing with the coronavirus pandemic outlined in a recorded video message on Sunday went down poorly in the UK. Johnson said that people who cannot work from home should be “actively encouraged” to go back to work but offered no guidelines on how to overcome issues with keeping a distance in the workplace or on ways in which to travel to work. Businesses and unions are uncomfortable over the safety of employees and members who are being urged to return to work.
Gains in the British pound had already been losing some over the last couple of weeks with 1.15/16 proving a hard barrier to overcome. That was as the UK notched up the highest number of COVID-19 deaths in Europe and the second highest globally.
EUR: German coronavirus cases rise
A rise in the number of virus cases both in South Korea and Germany was putting pressure on the euro alongside stock markets after gains on Friday. A long held fear is that the economic recovery will be stop-start as the number of virus cases increases after lockdown measures are relaxed.
Germany has been using the “reproduction rate” – the number of people each person with the virus goes on to infect – as their barometer for opening up the economy with 1.0 being the line in the sand. On Monday the German reproduction rate hit 1.1 and if sustained may mean some easing policies are reversed.
