GBP/USD: Will Brexit Clash In UK Send Pound Lower vs Dollar?

The pound was in recovery mode on Tuesday recouping Monday’s losses and pulling the pound to euro exchange rate back to €1.1950.

GBP/EUR is hovering at this level in early trade on Wednesday, which is approximately the same level that it started the week at. Any attempted move higher by sterling is likely to be capped as investors look ahead to the start of Brexit talks next week.

GBP/EUR: CBI Retail Sales At Highest Level Since April

The pound advanced in the previous session, paring losses from earlier in the week, helped in part by encouraging sales data. Figures from the Confederation of British Industry (CBI) showed that British retail sales climbed higher in late January and early February, reaching the highest level since April.

The CBI’s monthly industry gauge rise to 1 in February, up from 0 the previous month. Whilst this was below analysts’ expectations of 4, pound investors were willing to overlook the short fall after the survey also showed that retailers were planning to raise investment in the year ahead. This would be the first time in 2 years.

Any rise in the pound will be limited as investors turn their attention squarely to Brexit before trade talks begin next week. Yesterday, ministers from the EU approved their mandate for the post Brexit trade negotiations with the UK. It says that EU standards should serve as a reference point in any future trade deal. Meanwhile UK ministers has agreed the government’s mandate for the talks, which will be published on Thursday.

Euro Vulnerable As Germany Stagnates & Coronavirus Spreads

The euro slipped versus pound on weak economic data from Germany. Europe’s largest economy stagnated in the fourth quarter. The data showed that the weakness was caused principally by a slowdown in government and household spending. The industrial sector was also under pressure, whilst manufacturing has been in recession for almost half a year. On a positive note, the number of people employed rose. However, the overall picture is that it is still too early to call a recovery in the German economy.

Today there is no high impacting eurozone data due for release today. Investors will keep an eye on ECB speakers, particularly regarding comments over coronavirus. Germany is a manufacturing, exporter nation and more vulnerable that other countries to any Chinese or global economic slowdown.


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.