Pound Euro Exch Rate Jumps
The Pound Sterling Euro (GBP/EUR) exchange rate traded around 0.3% higher in the FX market this morning. The pairing was trading at around €1.1080.
The riskier Pound was able to rise this morning despite the fresh new bout of coronavirus worries.
Global cases have jumped beyond 8.8 million and investors are now anxious if this could mean further lockdowns. There have also been fresh restrictions imposed in Beijing and Victoria in Australia.
On a global scale, the coronavirus pandemic is continuing to accelerate. The World Health Organization (WHO) has reported its largest single-day increase in cases jumping by over 183,000.
The single currency edged lower, and against the USD it slipped to a three-week low due to divisions between EU leaders.
Bloc’s leaders met to discuss the coronavirus recovery fund. However, they disagreed on how to structure a planned recovery fund. This weighed on sentiment and left investors cautious.
In addition, over the weekend, the R rate in Germany rose above the crucial 1 level. This means COVID-19 is spreading at a quick rate in the country again.
It is believed this is due to the huge number of cases seen at an abattoir in northern Germany last week.
The Pound Edges Higher on BoE Governor Bailey’s Comments
Sterling edged higher on forex trading on Monday. This was following comments from the Bank of England’s (BoE) Governor Andrew Bailey.
He said that the BoE would be changing its strategy on unwinding its stimulus measures when the time is right. The BoE aims to reverse some of its quantitative easing programme before it thought about a rate hike, he added.
Bailey noted that the time will come to withdraw the monetary stimulus. And, in his opinion, it may be better to consider adjusting the level of reserves first. That is, without waiting to raise interest rates on a sustained basis.
Forex news reports that the Pound was limited by the prospect of a no-deal Brexit. Traders were concerned as the UK and EU seemed to make little progress in the ongoing trade negotiations.
Meanwhile, after a soft start to the new week, the British Pound has turned higher against the Euro, and the Dollar. This also includes a host of other currencies following the opening of European equity markets. These markets remain highly sensitive to news that the U.S. continues to see COVID-19 cases rise.
In Asia, markets traded in a relatively volatile fashion on Monday. But it appears that European markets have injected some confidence into the fray as they went higher on the open. This triggered a rally in the Pound.
