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Pound Appreciates As U.K. Virus Infections Continue To Decline

06:12, 26th July 2021

(RTTNews) - The pound was higher in the European session on Monday, after a drop in the nation's daily virus cases for the fifth consecutive day on Sunday.

The U.K. registered 29,173 new infections on Sunday, down from 48,161 seen last week.

Prime Minister Boris Johnson said that although falling infections are encouraging, the U.K. "is not out of the woods yet".

The PM warned that the impact of the ending of legal restrictions is yet to be seen.

Bank of England policy maker Gertjan Vlieghe remarked that the current monetary stimulus should be maintained for several quarters at least, and probably longer.

"And when tightening does become appropriate, I suspect not much of it will be needed, given the low level of the neutral rate," he said in a speech to the London School of Economics.

The pound rose to 10-day highs of 0.8536 against the euro and 1.3826 against the greenback, off its prior lows of 0.8573 and 1.3737, respectively. The currency is likely to find resistance around 0.84 against the euro and 1.41 against the greenback.

Recovering from its early lows of 151.40 against the yen and 1.2616 against the franc, the pound spiked higher to 10-day highs of 152.57 and 1.2688, respectively. Next immediate resistance for the pound is seen around 154 against the yen and 1.30 against the franc.