GBP/EUR: Brexit Hopes Keep Pound Elevated Above Euro

The pound jumped versus the US dollar on Monday on Conservative election hopes. The pound US dollar exchange rate rallied to US$1.287 gaining 0.7% across the session.

UK GDP data showed that the UK avoided a recession in the third quarter. The British economy grew 0.3% quarter on quarter in the third quarter. This was a marked improvement from the -0.2% contraction in the second quarter. However, on an annual basis the UK economy grew just 1%, down from 1.3% and the weakest annual growth in five years.

Whilst the fact that the UK didn’t fall into recession helped underpin the pound, it wasn’t until an announcement from Brexit Party leader Nigel Farage that the pound stormed higher.  Nigel Farage said that he would not field candidates against Conservative MPs. Farage sad that he will not contest the 317 seats that Conservatives won in the previous elections and that the Brexit Party will only run against Labour or Liberal Democrat seats. This means that the Conservatives have a greater chance of winning the majority that they need to push Brexit through Parliament. As a result, the pound rallied.

Today investors will look towards UK jobs data. Analysts are expecting average wages to have increased 3.85 year on tear in the three months to September. This would be in line with August. Unemployment is also expected to hold steady at 3.9%. These figures would show that the labour market remains resilient as the UK heads towards Brexit. Any weakness could drag the pound lower.

Fed Speaks in Focus Ahead of Powell’s Testimony

After a strong rally across the previous week, the US dollar trended lower on Monday. Developments in the US — China trade dispute continued to dominate market sentiment. US President Trump pushed back on claims that both the US and China were willing to gradually roll back tariffs already applied. As a result, the dollar eased back from recent gains.

Today there is little in the way of economic data. Federal Reserve speakers and trade headlines will drive the dollar before investors switch their focus to Federal Reserve Chair Jerome Powell 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 GBP = 1.28934 USD

Here, £1 is equivalent to approximately $1.29. This specifically measures the pound’s worth against the dollar. If the US dollar amount increases in this pairing, it’s positive for the pound.

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

1 USD = 0.77786 GBP

In this example, $1 is equivalent to approximately £0.78. This measures the US dollar’s worth versus the British pound. If the sterling number gets larger, it’s good news for the dollar. is a news site only and not a currency trading platform. 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 do not represent our views.