EUR/GBP hovers around 0.8400, ECB’s Lagarde and BOE’s Bailey keep an eye on
EUR/GBP remained bearish in the early hours of Thursday morning in Europe. Cross-currency pairs are approaching their annual lows recorded on Monday as fears over coronavirus in the eurozone are resurfaced. Record high cases in Germany, followed by Austria and the Netherlands, have resulted in multiple warnings reminiscent of the blockade in the region. Coronavirus infections broke records in parts of Europe on Wednesday as Europe became the epicenter of the epidemic that caused new travel restrictions. It is worth noting that the resurgence of the virus eases pressure on the European Central Bank (ECB) to follow the Western banks and thus puts further downward pressure on EUR/GBP.
In a recent commentary, Boštjan Vasle, a member of the Governors’ Council and Governor of the Central Bank of Slovenia, along with politicians Fabio Panetta and Robert Holzmann, ignored the rate hike negotiations. In contrast, European Central Bank governor and Bundesbank president Jens Weidmann said on Wednesday that inflation risks dominate in Germany and the rest of the eurozone. With block wrestling with covid, the UK is not far behind as daily infections exceed 43,000 and virus deaths drop to 149. However, Sky News cites UK health experts to point out the risk of a surge in COVID-19 cases in the new year.
Coronavirus pessimism and consequently increased pressure on the European Central Bank (ECB) to expand monetary easing, and in contrast to optimistic UK fundamentals, recent headlines on Brexit suggest the resilience of the pound I support it. Downing Street spokesperson #10 said there were significant differences between the UK and EU views on Northern Ireland, but British Prime Minister Boris Johnson’s willingness to work hard to address the issue is encouraging in the market. . But British politicians also agreed with Irish Prime Minister Michael Martin that Article 16 would not come into force until negotiations broke down.
However, a light calendar with only US public holidays and Germany’s final third-quarter GDP figures is expected to confirm the 1.8% forecast, challenging the EUR/GBP move ahead of the speeches by ECB Governor Christine Lagarde and Bank of England Governor Andrew Bailey. .
Bailey looks set to support the latest improvements in UK fundamentals to bolster hawkish hopes, but ECB’s Lagarde may risk worsening block economy due to coronavirus, which could put pressure on EUR/GBP prices can.