LONDON (Reuters) - The pound rose against both the dollar and the euro on Monday, but futures data showed the market turned net bearish on the pound for the first time since December last year.
The pound was boosted by improving global risk appetite and hopes that lockdown measures may start to be eased as the number of coronavirus cases in the UK appears to slow.
Britain is now seeing a downward trend in the number of people who are in hospital with the new coronavirus, the national medical director of England’s health service said on Sunday.
Prime Minister Boris Johnson returned to work on Monday, a month after he tested positive for COVID-19. He must now find a way to ease the lockdown without triggering a deadly second wave of the virus.
“Attention will be on him, and in particular the government more broadly, to announce some sort of pathway out of lockdown, as it becomes increasingly apparent how much economic damage is being done to the UK economy,” said Michael Hewson, chief market analyst at CMC Markets UK.
Johnson is expected to announce plans for how the lockdown could be eased as early as this week, the Daily Telegraph reported.
Against a broadly weaker dollar, the pound was up 0.27% at $1.2424 - a weekly high. Versus the euro, it rose around 0.3% in early London trading, last at 87.18 pence.
As he returned to Downing Street, Johnson gave no details of when or how the lockdown measures might ease, but said that more would be announced in the coming days.
The market turned bearish on the pound for the first time since December 2019, with negative bets on sterling outnumbering positive bets, according to weekly futures data for the week to April 21 <0#1CFTCCME>.
That follows six weeks of investors reducing their sterling long positions.
The pound’s long-term prospects are hampered by risks relating to Brexit, which will come into focus again as soon as coronavirus lockdown measures start to ease, analysts say.
Late on Friday, rating agencies S&P announced that it would keep the UK’s credit rating at “AA” (stable).
On Sunday, the British retail industry’s lobby group and its main trade union issued new guidance to retailers in preparation for an anticipated easing by the government of the country’s coronavirus lockdown and the re-opening of more stores.