The British pound is flat against the euro on Monday.
- UK aiming for ‘in principal’ trade deal with Japan
- France sees 2 days of 3000+ new coronavirus cases
- UK house prices rise 4.6% in August
GBP/EUR was higher by 2 pips (+0.10%) to 1.1052 as of 9am GMT. Last week the pound-euro exchange rate dropped -0.21%.
It was a quiet start to the new week with little deviation in the currency pair which traded in a 30-pip trading range around 1.105.
GBP: UK readying trade deal with Japan
The British pound has been trending lower in the past few days ahead of the latest round of UK/EU trade talks, which begin this week. The news today was related to the UK’s future trade deal with Japan, which has been agreed on an ‘in principal’ basis according to the Daily Telegraph citing Trade Secretary Liz Truss.
Last week Sterling fell four days out of five days, starting the week with a promising half-percentage gain before giving up ground across the week and eventually closing the week lower.
Since the UK economy has reopened and new government stimulus measures have been passed, house prices have jumped. According to online home listing website Right Move house prices rose 4.6% year-over-year in August, up from 3.7% in July, although -0.2% month over month.
EUR: France sees 2-days of 3000+ cases
The pound has dropped four out of the past five weeks against the euro, mostly in reflection of the weaker economic performance and worse experience with the pandemic than most countries in mainland Europe. This was reflected in the GDP figures for the second quarter, where the UK economy declined 20.4% versus 12.1% for the Eurozone. The UK economy did enter lockdown later than Europe but was also forced to remain in lockdown for longer to contain the outbreak.
So far the euro has held up despite a new wave of coronavirus cases in France, which continues to take hold with over 3000 cases reported for the past two days. Sunday was 3015 while on Saturday it was a new post-lockdown high of 3310.
