{"id":4262,"date":"2018-01-23T00:00:00","date_gmt":"2018-01-23T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100319-gbp-eur-brexit-optimism\/"},"modified":"2018-01-23T00:00:00","modified_gmt":"2018-01-23T05:00:00","slug":"100319-gbp-eur-brexit-optimism","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100319-gbp-eur-brexit-optimism\/","title":{"rendered":"Pound Charges To 5 Week High Versus Euro On Brexit Optimism"},"content":{"rendered":"<p>Brexit optimism boosted the pound versus the euro on Monday. Sterling rallied over 0.6% against the common currency on the first day of the trading week, which was also very light on economic data for both sides. The exchange rate hit a high of \u20ac1.1422, which is the strongest level that the pound has traded at versus the euro in five weeks.<\/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>There were no new economic data releases driving the pound higher in the previous session. Optimism surrounding Brexit was the principal factor pushing the pound higher, as market participants become increasingly hopeful that the UK will secure a good transitional deal and potentially a better Brexit deal than had initially been thought. A transitional period will make a softer Brexit more likely, which is favourable for the pound, however there has been very little mentioned regarding a transitional period since the Brexit Bill was agreed before Christmas.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why is a \u201csoft\u201d Brexit better for sterling than a \u201chard\u201d Brexit? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>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<p>High impacting U.K. data is once again in short supply today, before the calendar starts to fill up towards the end of the week. Market participants are expected to look towards the U.K. trade balance, which could provide some volatility for the pound. Analysts are forecasting a reduction in public sector net borrowing deficit. Other data today includes a report from the Confederation of British Industry, which analysts believe will show a decline in industrial orders.<\/p>\n<h2><a href=\"#eurozone-sentiment-data-in-focus\" name=\"eurozone-sentiment-data-in-focus\"><\/a>Eurozone Sentiment Data in Focus<\/h2>\n<p>The euro continued to reap the benefits of political developments in Germany, over the weekend. The SPD socialist party agreed to formally enter coalition talks with with Angela Merkel\u2019s Conservative CDU party, opening the route to a grand coalition. However, the divide in the SPD party was clear with 362 voting in favour of coalition talks and 279 voting against. This highlights the potential difficulties that the upcoming discussions will face.<\/p>\n<p>The eurozone has a very busy week as far as economic releases are concerned. Today investors will be focusing on sentiment indicators with ZEW sentiment surveys due from Germany and the eurozone, in addition to eurozone consumer confidence data.<\/p>\n<p>Current estimates point to increasing confidence in the eurozone, in addition to increased positivity regarding the German economy. Should the data come in even stronger than forecasts, the euro could climb higher versus the pound.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why does strong economic data boost a country\u2019s currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>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<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>Brexit optimism boosted the pound versus the euro on Monday. Sterling rallied over 0.6% against the common currency on the first day of the trading week, which was also very light on economic data for both sides. The exchange rate hit a high of \u20ac1.1422, which is the strongest level that the pound has traded [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4263,"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":["post-4262","post","type-post","status-publish","format-standard","has-post-thumbnail","category-eur","category-gbp","tag-brexit","tag-eur","tag-gbp"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Pound Charges To 5 Week High Versus Euro On Brexit Optimism - 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\/100319-gbp-eur-brexit-optimism\/\" \/>\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\\\/100319-gbp-eur-brexit-optimism\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100319-gbp-eur-brexit-optimism\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Pound Charges To 5 Week High Versus Euro On Brexit Optimism\",\"datePublished\":\"2018-01-23T05:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100319-gbp-eur-brexit-optimism\\\/\"},\"wordCount\":850,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100319-gbp-eur-brexit-optimism\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100319-gbp-eur-brexit-optimism.jpg\",\"keywords\":[\"Brexit\",\"eur\",\"gbp\"],\"articleSection\":[\"EUR\",\"GBP\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2018\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100319-gbp-eur-brexit-optimism\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100319-gbp-eur-brexit-optimism\\\/\",\"name\":\"Pound Charges To 5 Week High Versus Euro On Brexit Optimism - 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