The pound euro (GBP/EUR) exchange rate is rebounding after steep losses of almost 2% last week.
The pound fell last week after the BoE warned of a long recession and a lower peak interest rate level.
The upbeat market mood is helping the pound even though the outlook for the economy is weak. Consumers are expected to spend less this key festive period.
The euro is falling despite stronger than expected German industrial output, with rose 0.6% MoM in September, up from -0.8% and ahead of the 0.2% forecast.
ECB’s Panetta is due to speak later in the session.