{"id":4667,"date":"2018-06-25T00:00:00","date_gmt":"2018-06-25T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100529-gbp-eur-brexit-politics-uk-eu\/"},"modified":"2018-06-25T00:00:00","modified_gmt":"2018-06-25T04:00:00","slug":"100529-gbp-eur-brexit-politics-uk-eu","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100529-gbp-eur-brexit-politics-uk-eu\/","title":{"rendered":"GBP\/EUR: Politics To Drive Pound vs. Euro At Start Of The Week"},"content":{"rendered":"<p>The pound fell versus the euro across the previous week despite the Bank of England (BoE) boosting optimism of a rate hike this summer, hitting a low of \u20ac1.1357.<\/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>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. For example, it could be written: <em>1 GBP = 1.13990 EUR<\/em> <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> Or, if you were looking at it the other way around: <em>1 EUR = 0.87271 GBP<\/em> <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> <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p><a href=\"https:\/\/transferwise.com\/gb\/blog\/what-is-brexit-meaning-definition\">Brexit <\/a>concerns weighed on the pound across last week overshadowing hopes of an interest rate rise by the BoE in August. There was a change in the vote split at the central bank to 6-3, with 3 now supporting a rate hike, compared to 7-2 in May. This increased optimism among market participants that the BoE will raise interest rates to 0.75% in two months time.<\/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>However, despite this good news the pound still managed to finish the week lower as <a href=\"https:\/\/transferwise.com\/gb\/blog\/what-is-brexit-meaning-definition\">Brexit <\/a>fears were once again dominating. With more and more headlines suggesting that the U.K. will have a no deal Brexit, market participants are getting nervous. Large companies such as Airbus have threatened to pull out of the UK in the case of a no deal Brexit. They are not the first company to make such a statement and its very likely that they won\u2019t be the last. Should these companies follow through with their threats the damage to the economy could be huge.<\/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>With nothing on the economic calendar for today, investor attention is likely to remain on Brexit developments.<\/p>\n<h2><a href=\"#euro-rallies-despite-immigration-crisis-amp-trade-war-fears-growing\" name=\"euro-rallies-despite-immigration-crisis-amp-trade-war-fears-growing\"><\/a>Euro Rallies Despite Immigration Crisis &amp; Trade War Fears Growing<\/h2>\n<p>The euro was in demand at the end of last week despite the ratcheting up of trade war concerns and growing discontent over immigration policy across the region.<\/p>\n<p>Euro investors shrugged off news that US President Donald Trump was considering applying 20% trade tariffs to EU car imports into the US. This tit for tat measure came as a result of the EU implementing tariffs on \u20ac2.8 billion of US imports. However, the market remained sanguine barely budging.<\/p>\n<p>Euro traders also appear happy to shrug off growing divisions in the bloc over migration. Whilst 16 European leaders convened in Belgium on Sunday at a summit ahead of the European Summit on Thursday. This summit was called the Summit to save Merkel and intended to work towards a solution of the immigration crisis in Europe. A crisis which could cost German Chancellor Angela Merkel her job. Normally the political risk would weigh on demand for the euro, however the euro remains relatively calm.<\/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 fell versus the euro across the previous week despite the Bank of England (BoE) boosting optimism of a rate hike this summer, hitting a low of \u20ac1.1357. What do these figures mean? When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4668,"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-4667","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>GBP\/EUR: Politics To Drive Pound vs. Euro At Start Of The Week - 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\/100529-gbp-eur-brexit-politics-uk-eu\/\" \/>\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\\\/100529-gbp-eur-brexit-politics-uk-eu\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100529-gbp-eur-brexit-politics-uk-eu\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Politics To Drive Pound vs. Euro At Start Of The Week\",\"datePublished\":\"2018-06-25T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100529-gbp-eur-brexit-politics-uk-eu\\\/\"},\"wordCount\":881,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100529-gbp-eur-brexit-politics-uk-eu\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100529-gbp-eur-brexit-politics-uk-eu.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\\\/100529-gbp-eur-brexit-politics-uk-eu\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100529-gbp-eur-brexit-politics-uk-eu\\\/\",\"name\":\"GBP\\\/EUR: Politics To Drive Pound vs. Euro At Start Of The Week - 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