The British pound is lower against the euro on Monday.
- Pound pressured after a fortnight-long rally
- PM Boris Johnson, BOE Governor Bailey speaking
- Frances’s Le Mare thinks consumption is 5% below normal
GBP/EUR was down by 55 pips (-0.49%) to 1.1106 as of 3pm GMT. Last week the exchange rate rose +0.64% for its second weekly gain in a row.
The currency pair slid back from the 3-week high made on Friday to trade back down near the 1.11 handle. On Friday it had gained just +0.04% after reversing almost all of the day’s gains.
GBP: Pound faces selling after win streak
The British pound faced some selling pressure on Monday off the back of a fortnightly gain over the euro. There was no particular news flow to influence it other than bearish traders taking advantage of higher prices to position for potential future Brexit / trade / pandemic related uncertainty.
The Bank of England’s Andrew Bailey was addressing a school in a virtual classroom but his comments were in keeping with previous guidance from the central bank and so non-market moving.
Bailey said: “We are seeing the economy come back now somewhat, because obviously the restrictions are beginning to be lifted… But there’s a long way to go, we are very worried about jobs, as are a lot of people.”
There was also a sight development on the British government’s policy toward the pandemic. Prime Minister Johnson commented “We do think masks have a great deal of value in confined spaces.” So it seems likely masks could be mandatory in British shops quite soon.
EUR: Euro gains at start of a big week
The euro started the week on a firm footing, also making some choppy headway over the US dollar. It is a big week for events that could create movement in the currency; first the European Central Bank (ECB) meeting on Thursday and second the EU Summit on Friday.
The euro did get a boost on Monday following some relatively bullish comments from French Finance Minister Bruno Le Maire, who has calculated that “consumption activity is just 5% lower than normal.” Given the circumstances that would be very good if substantiated.