The GBPEUR exchange rate was slightly higher on Monday, but traders are waiting for today’s employment figures. With the pair hovering at the 1.1800 level, a stronger number could push the pound sterling back towards the yearly highs at 1.1833.
The GBP to EUR trades around 1.1760 after a recent strong rally on European gas price woes.
Employment figures ahead but coronavirus cases lurk
The UK economy will see the release of the most recent employment figures today. The pound was strengthened over the weekend by rate hike talk by the Bank of England.
As with other rallies in the pound, the British currency is touching the 1.1800 level just as the coronavirus cases rise once more. A total of 201,000 cases were recorded in the seven days to October 7th, which is the highest level since the summer.
Two-thirds of local authority areas in England are seeing a rise in rates, with Trafford in Greater Manchester having the highest rate in the UK, at 832.6 per 100k.
The pound has failed twice at the 1.1800 level this year as every time it flirts with that level, something gets in the way. Traders were buoyed by rate talk at the weekend as BoE policymaker Michael Saunders and the bank’s governor both chimed in.
Saunders told markets to prepare for “significantly earlier” rate hikes as inflation pressure mounts in the British economy, in an interview with the Telegraph newspaper.
“I’m not in favour of using code words or stating our intentions in advance of the meeting too precisely. The decisions get taken at the proper time,” Saunders said.
“But markets have priced in over the last few months an earlier rise in Bank rate than previously and I think that’s appropriate.”
Brexit wrangling back with Barnier and Johnson firing shots
Brexit is back in the news after recent French issues with the current fishing deal.
Michel Barnier, the EU’s chief negotiator has said that the bloc could suspend” the Brexit withdrawal agreement that he helped to draw up.
Mr Barnier, who is currently vying to become France’s next president, said that taking extreme actions would make Boris Johnson understand the need to “respect” the agreement he signed.
But Johnson was in no mood to back down and has said that the UK will override parts of the Brexit withdrawal agreement if new EU proposals amount to “tinkering around the edges” of the Northern Ireland protocol.
The EU is set to announce an end to the so-called Sausage Wars this week with new proposals for the export of British chilled meats to Northern Ireland, but Brexit minister Lord Frost is said to be seeking further concessions.
The energy crisis is due to scarce supply exhausted by rebounding demand, which risks slowing the region’s economic recovery by hiking business costs, household bills and inflation.
Johnson has come under fire closer to home as the Prime Minister is reportedly on holiday in the Costa Del Sol despite many issues affecting the country.