GBP/EUR: Brexit and UK Inflation Affects Pound vs Euro
  • Health experts warned that Britain is easing lockdown measures too quickly and risks a second wave.
  • Pound (GBP) buoyed by Brexit optimism, Michel Barnier says a deal is still possible
  • Euro (EUR) loos to GFK confidence data, after German business sentiment shows strong signs of improvement
  • Pound Euro exchange rate (GBP/EUR) trades steadily at €1.1040

The Pound is mildly higher on Thursday, after drifting lower versus the Euro in the previous session. The Pound Euro exchange rate settled on Wednesday -0.3% at €1.1038, as it traded within a familiar range.

At 05:15 UTC, GBP/EUR is trading -0.05% at €1.1040 in a quiet start to the day.

Risk off was the theme of the day in the previous session, after health experts warned Britain that a second wave of coronavirus as coming as Prime Minister Boris Johnson continued to lift restrictive lockdown measures, at a faster rate than scientists would have liked.

Brexit remains a key driving factor, particularly ahead of another round of trade talks next week. EU Chief negotiator Michel Barnier has said that the ball is in the UK’s court now; Britain must send clear signals that it wants a trade deal. He added that a trade deal was still possible before the end to the year. This is offering some support to the Pound as investors have fretted over whether a trade deal was even possible on such a tight timetable and with coronavirus delays.

Looking ahead investors will focus on industry data from the Confederation of British Industry, a survey that looks at trends in the retail and wholesale distribution sector. Analysts are expecting to see an improvement from -50% to -34% month on month in June. Despite moving in the right direction this still reflects the impact of lockdown.

The Euro traded higher versus the Pound on Wednesday after German IFO data showed that business confidence in the Eurozone’s largest economy improved in June as lockdown measures were eased. The business climate index jumped to 82.6 in June from 79.7 the previous month. This not only beat expectations of 85 but was also the strongest increase ever recorded.

Meanwhile the current situation index printed at 81.3 in June, up from 78.9. All in all, the data shows that German businesses see light at the end of the tunnel.

Today, the economic calendar and particularly data from Germany will remain in focus with investors looking towards German GFK consumer confidence survey in July. Analysts are expecting to see an improvement from -18.9 in June to -12. Minutes from the latest ECB meeting could also underpin the Euro. 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.