Pound soars as Boris confirms Freedom Day – while Delta variant concerns hamper euro
Jeremy Thomson-Cook, Chief Economist at international business payments specialist Equals Money, was speaking after pound sterling finished Monday at a value of €1.17 – its highest total of the month so far. The pound was also valued at just under $1.39 – a cent higher than in the latter stages of last week.
Mr Cook said: “The pound has started the week off on the front foot as it hit its highest levels in July so far, making another attempt at fresh highs since April against both the euro and dollar.
“With the UK set to reopen on July 19, the pound seems to be benefiting from the resumption of economic activity.”
However, he added: “Covid numbers and an increase in the hospitalisation rate will of course be a downside risk for the pound as well as any changes in course by the government or a new assessment by the Bank of England.”
Conversely, Mr Cook said: “Moves on the euro were subdued yesterday in the absence of any real data.
“The key theme for the euro over the short term will continue to be news of the spread of the Delta variant in Europe with France, the Netherlands and parts of Spain all announcing new restrictions to curb the contagion.”
As of 10am today, the pound at was valued at £1.3861 compared to 1.3885 dollars at the previous close.
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“This disease, coronavirus, continues to carry risks for you and your family.
“We cannot simply revert instantly from Monday July 19 to life as it was before Covid.
“We will stick to our plan to lift legal restrictions and to lift social distancing, but we expect and recommend that people wear a face covering in crowded and enclosed spaces where you come into contact with those you don’t normally meet, such as on public transport.”
Mr Johnson warned July 19 “should not be taken as an invitation by everybody simply to have a great jubilee and freedom from any kind of caution or restraint”.
He further admitted the current wave of cases would mean more hospital admissions and deaths.
However, he added: “We’ve come to a stage in the pandemic when there is no easy answer and no obvious date for unlocking.”
Nevertheless, Nikesh Sawjani, an economist at Lloyds Bank Commercial Banking, told the PoundSterlingLive website: “The further easing in restrictions will go some way to helping the UK’s economic recovery.”
The lifting of most restrictions in Europe has led to a surge in business activity – but the rise of the Delta variant, which originated in India, is proving a cause for concern.
Speaking of the recovery, Erik Nielsen, chief economist at UniCredit, yesterday told the Financial Times: “I’m a bit more nervous that it could get derailed by Delta.
“It has to get quite bad before we get another lockdown, but Google mobility data shows that it is not so much the lockdowns that drive behaviour but voluntary restraint.”
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