The pond advanced versus the euro in the previous session. The pair closed 0.2% higher at €1.1792, mid-way between the high and the low of the day. The pound is holding steady versus the euro in early trade on Thursday.
The pound traded mixed versus its peers in the previous session, as attention returned to Brexit. In a speech at LSE, European Commission President Ursula von der Leyen warned the UK that they would need to stick close to EU rules if they wanted to achieve a far-reaching trade deal. She also said that it would be impossible to reach a comprehensive trade deal by the end of 2020. The Prime Minister Boris Johnson was also clear that the transition period will not be extended beyond one year. Whilst talks will be tough both sides appear to want to do a deal. Which is offering some support to sterling.
Today the focus will remain on Brexit as Parliament votes on the Withdrawal Bill. Both the House Commons and the House of Lords must pass the deal before it is enshrined in law. No hold ups are expected given Boris Johnson’s overall majority in Parliament.
German industrial Production To Weigh On Euro?
The euro was out of favour on Wednesday as investors digested disappointing German factory orders. November industrial orders declined -6.5% year on year, worsening instead of improving as analysts had predicted. There had been optimism that the slump in the German manufacturing sector was bottoming out. However, the reality looks very different.
Delving deeper into the numbers, the data shows that the orders books are weak, with new orders down a dismal -6.5% on the year. The second straight year of falling orders. This suggests that there will be no turnaround in the sector anytime soon. Instead the free fall looks set to continue.
Today German industrial production data will be in focus. Analyst are expecting the data to show an improvement, however given today’s disappointing factory orders that might not happen.
For example, it could be written:
1 GBP = 1.13990 EUR
Here, £1 is equivalent to approximately €1.14. This specifically measures the pound’s worth against the euro. If the euro amount increases in this pairing, it’s positive for the pound.
Or, if you were looking at it the other way around:
1 EUR = 0.87271 GBP
In this example, €1 is equivalent to approximately £0.87. This measures the euro’s worth versus the British pound. If the sterling number gets larger, it’s good news for the euro.
