- Pound (GBP) is under pressure on a gloomy post lockdown outlook
- Michel Barnier threatened to walk away from Brexit talks if no progress is made
- Euro (EUR) trades mixed after ECB minutes point to further easing
- EZ consumer confidence in focus
The Pound Euro (GBP/EUR) exchange rate is holding steady after three days of losses. The pair settled -0.1% lower on Thursday at €1.1208, after picking up off the session low of €1.1192. At 05:15 UTC, GBP/EUR trades +0.04% at €1.1212.
The outlook for the UK is still pretty grim even with the national lockdown ending next week. On Wednesday Boris Johnson announced the post lockdown Tier divisions. More that 20 million people in England will live under Tier 3 the toughest category for covid restrictions. Whilst London was put into Tier 2, it was also placed on high alert.
The outlook post lockdown is pretty grim and this dragged on demand for the Pound. UK stocks also reversed earlier gains on Wednesday to end the day lower.
Brexit headlines were also unsupportive of the Pound. The EU has threatened to pull out of Brexit trade talks if the UK refuses to compromise. Michel Barnier has warned that he wants to see a major shift by Downing Street by the end of the week.
Michel Barnier will reportedly meet with EU fishing ministers today. The EU has played down the importance of the meeting. Fishing waters have been a key sticking point in trade talks so far. Michel Barnier had been due to return to London to resume face to face talks on Friday.
The Euro traded mixed versus its major peers in the previous session after weaker than expected German consumer confidence data and after the minutes to the latest European Central Bank meeting.
The minutes from the November ECB meeting revealed that policy makers saw risks to growth clearly tilted to the downside, agreeing that this warranted an adjustment in its monetary policy in December. The prospect of further monetary easing next month could cap any gains in the common currency.
Today attention will remain firmly on the Eurozone economic calendar with Eurozone consumer confidence in focus.
