Cyprus Mail
Banking and Finance Business

Sterling falls vs euro, steady vs dollar; Chancellor’s support measures in focus

The pound fell against the euro, as the common currency rose on Monday, and held steady against the U.S. dollar, as traders looked ahead to this month’s Brexit negotiations and more government support measures expected later this week.

By the end of July, traders anticipate more clarity on whether Britain will agree a trade deal with the European Union.

Britain left the EU in January, but has full access to the bloc under a transition period that runs until the end of December.

Britain and the EU need to make progress on EU financial market access given that the coronavirus crisis will make it even harder to cope with potential disruption if there is no agreement, banking lobby AFME said on Monday.

Some attention will be given to the construction purchasing managers’ index for June, expected to rise to 47 from 28.9 the month before, economists polled by Reuters found, although preliminary versions of the other British PMIs have been already released. Data is released at 0830 GMT.

Sterling was last down 0.4% against the euro at 90.43 pence , but flat at $1.2485 against the dollar.

“Euro/sterling is consolidating above 0.90 and should remain range-bound into Wednesday, when Chancellor Rishi Sunak announces a fresh range of UK support measures in parliament,” said ING analysts in a note to clients, adding that “a break under 0.90 in EUR/GBP would be a surprise”.

British finance minister Rishi Sunak is considering plans to hand out vouchers of 500 pounds ($624) for adults, and 250 pounds for children, to spend in sectors of the economy hit hardest by the coronavirus crisis, the Guardian said on Sunday.

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