{"id":4510,"date":"2018-04-23T00:00:00","date_gmt":"2018-04-23T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100443-gbp-eur-brexit-fears-reappear\/"},"modified":"2018-04-23T00:00:00","modified_gmt":"2018-04-23T04:00:00","slug":"100443-gbp-eur-brexit-fears-reappear","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100443-gbp-eur-brexit-fears-reappear\/","title":{"rendered":"GBP\/EUR: Pound At \u00e2\u201a\u00ac1.14 Vs Euro As Brexit Fears Reappear"},"content":{"rendered":"<p>The previous week saw the pound close 1.3% lower against the euro as pound traders digested a hat-trick of disappointing data and cautious commentary from the Bank of England. However weak demand for the euro on the final trading day of the week meant that the pound euro exchange rate finished just 0.1% lower on Friday at \u20ac1.1393.<\/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 had a busy week last week thanks high impacting economic releases and commentary from Bank of England Governor Mark Carney. Market participants learnt that UK wage growth remained constant at 2.8%, slightly short of the 3% forecast. Meanwhile inflation dipped to 2.5% in March, down from 2.7% in the previous month. Finally, retail sales declined -1.2%, well short of the -0.6% decline forecast by analysts. The good news is that earnings overtook inflation, however particularly harsh weather and a challenging climate meant consumers stayed away from the shops. To top the week off BoE Governor Mark Carney suggested that a hike was still coming although he didn\u2019t want to get \u201ctoo focused on precise timing\u201d. Investors pushed back the odds of the next rate hike, which sent the pound lower.<\/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<p>This week investors will look to UK GDP data, which analysts are expecting will have dipped to 0.3% from 0.4% quarter on quarter due to weather related disruptions. Analysts are forecasting that annual rate will remain constant at 1.4%.<\/p>\n<p><a href=\"https:\/\/transferwise.com\/gb\/blog\/what-is-brexit-meaning-definition\">Brexit<\/a> is also expected to re-surface again this week after the EU rejected all of UK Prime Minister Theresa May\u2019s solutions to the Irish border problem. No solution to this problem means that a battle within May\u2019s conservatives between those who want to stay in the EU Customs Union and those who don\u2019t is likely to erupt, potentially leaving May in a vulnerable position.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>How does political risk have impact on a currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Political risk drags on the confidence of consumers and businesses alike, which means both corporations and regular households are then less inclined to spend money. The drop in spending, in turn, slows the economy. Foreign investors prefer to invest their money in politically stable countries as well as those with strong economies. Signs that a country is politically or economically less stable will result in foreign investors pulling their money out of the country. This means selling out of the local currency, which then increases its supply and, in turn, devalues the money. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<h2><a href=\"#pmi-data-in-focus-prior-to-thursday-s-ecb-rate-decision\" name=\"pmi-data-in-focus-prior-to-thursday-s-ecb-rate-decision\"><\/a>PMI Data In Focus Prior To Thursday\u2019s ECB Rate Decision<\/h2>\n<p>The euro was broadly lower on Friday as investors looked ahead to the upcoming week which sees a raft of influential data being released, in addition to the European Central Bank policy decision. Since the last ECB meeting, eurozone economic data has disappointed, estimates for inflation has declined and fears over a global trade war have emerged. As a result, economists are not expecting any mention of a winding down of the current bond buying programme until around June.<\/p>\n<p>Today investors will be watching the purchasing managers index reports to see whether the data shows that growth momentum in the eurozone is slowing.<\/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 previous week saw the pound close 1.3% lower against the euro as pound traders digested a hat-trick of disappointing data and cautious commentary from the Bank of England. However weak demand for the euro on the final trading day of the week meant that the pound euro exchange rate finished just 0.1% lower on [&hellip;]<\/p>\n","protected":false},"author":163946601,"featured_media":4511,"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-4510","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":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>GBP\/EUR: Pound At \u00e2\u201a\u00ac1.14 Vs Euro As Brexit Fears Reappear - 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\/100443-gbp-eur-brexit-fears-reappear\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Tarun Gidwani\" \/>\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\\\/100443-gbp-eur-brexit-fears-reappear\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100443-gbp-eur-brexit-fears-reappear\\\/\"},\"author\":{\"name\":\"Tarun Gidwani\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/cb9d08b81054b1281b909957fd8222cb\"},\"headline\":\"GBP\\\/EUR: Pound At \u00e2\u201a\u00ac1.14 Vs Euro As Brexit Fears Reappear\",\"datePublished\":\"2018-04-23T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100443-gbp-eur-brexit-fears-reappear\\\/\"},\"wordCount\":882,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100443-gbp-eur-brexit-fears-reappear\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100443-gbp-eur-brexit-fears-reappear.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\\\/100443-gbp-eur-brexit-fears-reappear\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100443-gbp-eur-brexit-fears-reappear\\\/\",\"name\":\"GBP\\\/EUR: Pound At \u00e2\u201a\u00ac1.14 Vs Euro As Brexit Fears Reappear - 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