The British pound is lower against the euro on Friday.
- Lisbon Portugal & western Germany re-impose localised lockdown
- Macron / Merkel will not present a new EU Recovery Fund proposal
- UK Shopping centre operator Intu files for administration
- Pound-euro exchange rate -0.51%
GBP/EUR was down by 65 pips (-0.57%) to 1.1000 as of 3pm GMT.
The currency pair started selling off in the late morning and continued to fall until dropping below the 1.10 round number for the first time since March 26. It had risen +0.29% yesterday.
GBP: Shopping Centre company collapses
Weaker global risk appetite saw the British pound comes out worse as dollar strengthened as a haven asset. Rising coronavirus cases from Western Germany to Portugal to Australia to Texas saw financial markets take freight, selling perceived riskier currencies in the process.
The long drawn out reopening of the UK economy from lockdown has pulled British shopping centre Intu into administration proceedings. It was unable to agree payment holidays for its £4.5 billion in debt with creditors. Intu had received just 29% of second-quarter rent from retailers in its shopping centres, down from 77% in the same period last year.
EUR: No new EU Recovery fund plans next week
A press release on Friday announced that French President Emmanuel Macron and German Chancellor Angela Merkel will not present a new EU recovery fund proposal next week. They are scheduled to meet to discuss options for the fund. They got the ball rolling and are now backing – and encouraging others to back the EU commission version valued €750 billion.
EU Commission President von der Leyen said on Friday “We need a stimulus agreement before the summer holidays.” The next scheduled meeting of European minister is on 17-18 July.
ECB President Lagarde continued the dovish rhetoric heard in ECB minutes in a webinar on Friday, noting “We probably have passed the lowest point of the crisis. But we are cautious about the possibility of a second wave of infections.” and the “Economic recovery will be sequential.”