{"id":3818,"date":"2017-07-03T00:00:00","date_gmt":"2017-07-03T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100153-gbp-eur-brexit-pmi\/"},"modified":"2017-07-03T00:00:00","modified_gmt":"2017-07-03T04:00:00","slug":"100153-gbp-eur-brexit-pmi","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100153-gbp-eur-brexit-pmi\/","title":{"rendered":"GBP\/EUR rate driven by Brexit talks and release of PMIs"},"content":{"rendered":"

The pound finished last week at about the same level versus the euro as it started, struggling to remain above \u20ac1.1400 for any extended period of time. After central bankers stole the show last week, Brexit negotiations and economic data will be back in the driving seat for the pound-euro currency pair this week.<\/p>\n\n\n\n\n\n
What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n
\n

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. <\/p>\n

For example, it could be written: 1 GBP = 1.13990 EUR<\/em> <\/p>\n

Here, \u00a31 is equivalent to approximately \u20ac1.14. This specifically measures the pound\u2019s worth against the euro. If the euro amount increases in this pairing, it\u2019s positive for the pound.<\/em> <\/p>\n

Or, if you were looking at it the other way around: 1 EUR = 0.87271 GBP<\/em> <\/p>\n

In this example, \u20ac1 is equivalent to approximately \u00a30.87. This measures the euro\u2019s worth versus the British pound. If the sterling number gets larger, it\u2019s good news for the euro.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n

Reports over the weekend reveal that there has been a considerable change in mood in the Department for exiting the European Union (DExEU) since the general election in June. The influence of the Treasury is growing, forcing ministers to choose between prioritising Britain\u2019s economic interests or sovereignty. Business influences that were silent pre-election are now finding their voices again and are more supportive of a high-access soft Brexit deal. Any signs over the course of the next week that the DExEU could be softening its approach would help support the pound.<\/p>\n\n\n\n\n\n
Why is a \u201csoft\u201d Brexit better for sterling than a \u201chard\u201d Brexit? <\/th>\n<\/tr>\n<\/thead>\n
A soft Brexit implies anything less than UK\u2019s complete withdrawal from the EU. For example, it could mean the UK retains some form of membership to the European Union single market in exchange for some free movement of people, i.e immigration. This is considered more positive than a \u201chard\u201d Brexit, which is a full severance from the EU. The reason \u201csoft\u201d is considered more pound-friendly is because the economic impact would be lower. If there is less negative impact on the economy, foreign investors will continue to invest in the UK. As investment requires local currency, this increased demand for the pound then boosts its value. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n

<\/a>Manufacturing PMI\u2019s in focus<\/h2>\n

The other key area this week for both the euro and the pound are the release of economic health indicators, as measured by PMI\u2019s. The PMI\u2019s are released for the manufacturing sector today, the construction sector on Tuesday and finally the service sector on Wednesday. A figure over 50 represents expansion within the sector, whereas a figure below 50 indicates contraction.<\/p>\n

The manufacturing PMI is important for both the pound and the euro because manufacturing contributes to a large total of the UK and eurozone GDP. It\u2019s considered an important indicator not just of business conditions in that sector but for the overall economic conditions of the region.<\/p>\n

Whilst the eurozone is expected to print at 57, the UK is forecast to print at 56.7. Weaker figures from either would pull that particular currency lower.<\/p>\n\n\n\n\n\n
Why does strong economic data boost a country\u2019s currency? <\/th>\n<\/tr>\n<\/thead>\n
Solid economic indicators point to a strong economy. Strong economies have strong currencies because institutions look to invest in countries where growth prospects are high. These institutions require local currency to invest in the country, thus increasing demand and pushing up the money\u2019s worth. So, when a country or region has good economic news, the value of the currency tends to rise. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n

The other area of interest today will be the unemployment level for the eurozone. The rate is expected to tick down to 9.2% from 9.3% the previous month. A fall in the unemployment rate is considered positive for a currency, so a larger decrease than expected may find the euro pushing itself ahead of the pound.<\/p>\n\n\n\n
\n


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This article was initially published on TransferWise.com from the same author. The content at Currency Live is the sole opinion of the authors and in no way reflects the views of TransferWise Inc.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

The pound finished last week at about the same level versus the euro as it started, struggling to remain above \u20ac1.1400 for any extended period of time. After central bankers stole the show last week, Brexit negotiations and economic data will be back in the driving seat for the pound-euro currency pair this week. What […]<\/p>\n","protected":false},"author":163946597,"featured_media":3819,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1380,1379],"tags":[1386,1395,1394],"class_list":{"0":"post-3818","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-eur","8":"category-gbp","9":"tag-brexit","10":"tag-eur","11":"tag-gbp"},"acf":[],"yoast_head":"\nGBP\/EUR rate driven by Brexit talks and release of PMIs - Currency Live<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/currencylive.com\/news\/100153-gbp-eur-brexit-pmi\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Fiona Cincotta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100153-gbp-eur-brexit-pmi\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100153-gbp-eur-brexit-pmi\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR rate driven by Brexit talks and release of PMIs\",\"datePublished\":\"2017-07-03T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100153-gbp-eur-brexit-pmi\\\/\"},\"wordCount\":815,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100153-gbp-eur-brexit-pmi\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100153-gbp-eur-brexit-pmi.jpg\",\"keywords\":[\"Brexit\",\"eur\",\"gbp\"],\"articleSection\":[\"EUR\",\"GBP\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2017\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100153-gbp-eur-brexit-pmi\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100153-gbp-eur-brexit-pmi\\\/\",\"name\":\"GBP\\\/EUR rate driven by Brexit talks and release of PMIs - 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