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The British pound is flat against the euro on Tuesday.

  • Germany set to decide on lifting travel restrictions tomorrow
  • Round 4 of post-Brexit negotiations started today
  • UK home price / mortgage data released
  • Broader markets see stock markets rise and the US dollar fall

GBP/EUR was higher by 10 pips (+0.08%) to 1.1228 as of 3pm GMT.

The currency pair bounced around between 1.12 and 1.125 but ended up near the flat line by the afternoon. Yesterday the exchange rate rose +0.87%.

GBP: Risk sentiment supported

It was the US dollar that attracted most of the action in currency markets today, leaving cross rates like EUR/GBP trading in tight ranges. Both EUR/USD and GBP/USD were making solid gains with the greenback falling out of favour. The mood in the market has turned much more positive in the last week and investor demand for cash in the form of dollars has eased off.

The first day of the latest round of post-Brexit trade talks may have added to the quieter tone with markets awaiting statements from key players over the coming days.

Data for the UK housing market mostly missed expectations. Home prices fell by more than expected in April according to Nationwide and mortgage approval dropped heavily according to the Bank of England.

EUR: Germany plans for lifting travel restrictions

The euro remained is off its two-month highs over Sterling but reached its highest against the US dollar since March 17. News that Germany will announce how it goes about lifting travel restrictions tomorrow added to optimism surrounding the single currency.

Germany, having successfully navigated the pandemic so far – and also as Europe’s largest economy is a bellwether for the next steps Europe will take in lifting lockdown restrictions. With most shops and public space open again in Germany, albeit with social distancing limitations – the country is now looking toward supporting its tourism industry by easing travel restrictions.

German officials have said they want to replace travel warnings with travel ‘guidelines’ with the  aim of lifting travel warnings for EU and some other countries. Germany will meet with its neighbouring and transit countries before June 15 to discuss the principles to be applied.