{"id":4242,"date":"2018-01-16T00:00:00","date_gmt":"2018-01-16T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100309-gbp-eur-uk-german-inflation\/"},"modified":"2018-01-16T00:00:00","modified_gmt":"2018-01-16T05:00:00","slug":"100309-gbp-eur-uk-german-inflation","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100309-gbp-eur-uk-german-inflation\/","title":{"rendered":"Pound Steady vs. Euro As Investors Prepare for UK &#038; German Inflation D"},"content":{"rendered":"<p>The pound euro exchange rate traded within a narrow range in the previous session as demand for both currency remained strong. Although, there was little in the way of fresh news or data to give additional direction to either currency. The pound euro exchange rate continued to hover around the \u20ac1.1250 mark, a level which is has been trading close to since September.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\n<p> 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<p> For example, it could be written: <em>1 GBP = 1.13990 EUR<\/em> <\/p>\n<p> <em>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<p> Or, if you were looking at it the other way around: <em>1 EUR = 0.87271 GBP<\/em> <\/p>\n<p> <em>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<p>The pound was trading strongly across the board as market participants continued to deal with reports from last week that some eurozone finance ministers are willing to push for a \u201csoft Brexit\u201d for the UK. Finance ministers from Spain and Holland both said that they are willing to work with the UK in order to keep Britain closely aligned to the EU after Brexit. This could mean keeping the UK within the single market and customs union. Both of which would be the best possible Brexit outcome for the UK economy and therefore the pound.<\/p>\n<p>Today investors will turn their attention back to economic data. UK inflation data, in the form of consumer price index (CPI), is due this morning. CPI for December is expected to have dropped slightly from 3.1% in November to 3% in December. If the figure come in higher than what city analysts are forecasting, the pound could rally versus the euro. This is because higher inflation could boost the odds of the Bank of England raising interest rates.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why do raised interest rates boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Higher interest rate environments tend to offer higher yields. So, if the interest rate or at least the interest rate expectation of a country is relatively higher compared to another, then it attracts more foreign capital investment. Large corporations and investors need local currency to invest. More local currency used then boosts the demand of that currency, pushing the value higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<h2><a href=\"#germany-on-track-for-2nd-grand-coalition\" name=\"germany-on-track-for-2nd-grand-coalition\"><\/a>Germany on Track for 2nd Grand Coalition<\/h2>\n<p>Political developments in Germany have been central to the euros strength at the end of last week. The German SPD party has agreed to a coalition deal with Chancellor Angela Merkel\u2019s CDU party. There had been some discontent from senior SPD leaders over the agreement, however, these senior members were quickly silenced. The prospect of the political vacuum ending in Germany after many months is encouraging for euro traders. Furthermore, Germany was previously ruled by a \u201cgrand coalition\u201d, so another grand coalition should mean continuation in terms of economic policy, which is will also please euro traders<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>How does political stability boost a currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Political stability boosts both consumer and business confidence, which means corporations and regular households alike are more likely to spend money. The increased spending, in turn, then boosts the economy. Foreign investors prefer to invest their money in politically stable countries as well as those with strong economies. For foreign investors to put their money into an economy, they need local currency. As they acquire the money needed, the demand for that particular currency increases, which then boosts its value. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>Today, inflation figures in Germany will be under the spotlight. German inflation often serves as a good precursor for eurozone inflation which is due on Wednesday. Analysts are forecasting a reading from Germany of 1.7%. Inflation has been sluggish in Germany and the eurozone in recent months. Should the figure be lower than analysts expect, the euro could fall.<\/p>\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td>\n<p><small><em><br \/>\nThis publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Inc., Currency Live or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. Consult our <a href=\"https:\/\/currencylive.com\/risk-warning\/\">risk warning<\/a> page for more details.<\/em><\/small><\/p>\n<p><small><em>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":"<p>The pound euro exchange rate traded within a narrow range in the previous session as demand for both currency remained strong. Although, there was little in the way of fresh news or data to give additional direction to either currency. The pound euro exchange rate continued to hover around the \u20ac1.1250 mark, a level which [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4243,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1380,1379],"tags":[1395,1394,1387],"class_list":["post-4242","post","type-post","status-publish","format-standard","has-post-thumbnail","category-eur","category-gbp","tag-eur","tag-gbp","tag-inflation"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Pound Steady vs. Euro As Investors Prepare for UK &amp; German Inflation D - 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\/100309-gbp-eur-uk-german-inflation\/\" \/>\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\\\/100309-gbp-eur-uk-german-inflation\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100309-gbp-eur-uk-german-inflation\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Pound Steady vs. Euro As Investors Prepare for UK &#038; 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