GBP/EUR: Brexit Uncertainties & ECB Doubts Steady Pound-Euro

The euro US dollar exchange rate finished the session on Monday 0.1%. This was more of a dollar weakness story rather than the euro displaying any fundamental strength. The pair is slipping lower in early trade on Tuesday and remains above the key level of US$1.10.

The euro failed to take advantage of the weaker US dollar. A combination of soft wholesale German inflation and the prospects of months of political gridlock in Spain, Europe’s fourth largest economy left euro investors lacking enthusiasm.

Today investors will remain focused on the economic calendar. German ZEW sentiment data could offer some support to the euro as analysts predict a slight improvement to sentiment in Germany in November. If so, this will be the second straight month of improving figures after sentiment took a hit as the manufacturing sector slumped amid the ongoing US – China trade dispute.  Eurozone sentiment is expected to drop further.

Germany will remain in focus on Wednesday with inflation figures and then again on Thursday with the highly anticipated German third quarter GDP reading. After contracting in the second quarter, analysts are expecting a contraction again in the third quarter. Two consecutive quarters of contraction make a technical recession.

Weak data will cause investors to raise bets that the European Central Bank will ease monetary policy further to support the eurozone economy.

Fed Speakers Ahead of Jerome Powell’s Testimony Before Congress on Wednesday

After a strong previous week, the US was pausing for breath on Monday. The mood in the market took a turn for the worse amid growing uncertainty over the US – China trade deal. After Trump pushed back on the idea of gradually rolling back trade tariffs, investors are questioning how close to the two sides really are to achieving a phase one trade deal. Despite usually being seen as a safe haven, the dollar edged lower versus most of its major rivals.

There is no high impacting US economic data today. Trade headlines with remain a central focus. Investors will also look towards several Fed official speeches prior to Federal Reserve Chair Jerome Powell’s testimony before Congress on Wednesday and Thursday.

 

What do these figures mean?
When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.

For example, it could be written:

1 EUR = 1.12829 USD

Here, €1 is equivalent to approximately $1.13. This specifically measures the euro’s worth against the dollar. If the U.S. dollar amount increases in this pairing, it’s positive for the euro.

Or, if you were looking at it the other way around:

1 USD = 0.88789 EUR

In this example, $1 is equivalent to approximately €0.89. This measures the U.S. dollar’s worth versus the euro. If the euro number gets larger, it’s good news for the dollar.

 


Currencylive.com is a news site only and not a currency trading platform.
Currencylive.com is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.