The British pound is higher against the euro on Wednesday.
- Barnier: UK proposals for City of London “unacceptable”
- Merkel: post-Brexit progress “very limited”
- Germany May retail sales way ahead of expectations
- Pound-euro exchange rate is +0.86% this week
GBP/EUR was higher by 52 pips (+0.47%) to 1.1088 as of 4pm GMT.
The currency pair held firmly above the 1.10 level on Wednesday, nudging to 1.108 before stabilising. Yesterday it rose +0.27%.
GBP: Pound edges up as post Brexit talks cover The City
Seller’s exhaustion at three-month lows probably explains Sterling strength over the past two days more than the news flow. News on post-Brexit talks has not been overly favourable but still the British pound has managed to edge higher.
EU Chief Negotiator Barnier said on Wednesday that British proposals to give the City of London access to EU financial markets are “unacceptable because they seek to maintain the benefits of the single market without the obligations.” It is a familiar line.
German Chancellor Angela Merkel made her own observations clear to the German parliament on Wednesday, saying “Progress in talks is, to put it cautiously, very limited.” She said “Germany and the EU “must be prepared… for the possibility that a deal doesn’t materialise”.
EUR: Final Manufacturing PMI data stable in June
Discussing UK preparedness, a spokesman for Boris Johnson said on Wednesday that the UK is prepared for any result at the end of the year – “whether that be a free trade agreement or whether that be having a trading relationship based on the same terms that Australia currently has.”
There was not much to distinguish between the two economies according to the final Manufacturing PMI data for June. The UK June final manufacturing PMI was 50.1 versus 50.1 preliminary estimates. Eurozone June final manufacturing ticked up to 47.4 from 46.9 in the previous estimate – but remains in contraction territory.
The big economic surprise from Europe was the +13.9% rise in Germany May retail sales. Expectations were for a rise of +3.5% month-over-month.
