{"id":4849,"date":"2018-09-05T00:00:00","date_gmt":"2018-09-05T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100629-gbp-eur-rumoured-progress-brexit\/"},"modified":"2018-09-05T00:00:00","modified_gmt":"2018-09-05T04:00:00","slug":"100629-gbp-eur-rumoured-progress-brexit","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100629-gbp-eur-rumoured-progress-brexit\/","title":{"rendered":"GBP\/EUR: Pound Ends Higher vs. Euro &#8211; Rumoured Progress Brexit Talks"},"content":{"rendered":"<p>The pound euro exchange rate had a volatile session on Tuesday. The pair had a rollercoaster day moving from a session low to a high of \u20ac1.1125 to low, before rallying higher into the close.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th><small> What do these figures mean? <\/small><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><small> 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.h If the euro amount increases in this pairing, it\u2019s positive for the pound. Or, if you were looking at it the other way around:<em>1 EUR = 0.87271 GBP<\/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. <\/small><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>There were several factors which influenced the pound\u2019s movement on Tuesday and which explains the volatility that sterling experienced. First off, disappointing construction data sent the pound lower. Construction activity slowed significantly more than analysts had been forecasting, dropping to 52.9 in August from 55.8 in July and well below below the 54.9 that analysts had been expecting.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th><small> Why does poor economic data drag on a country\u2019s currency? <\/small><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><small> Slowing economic indicators point to a slowing economy. Weak economies have weaker currencies because institutions look to reduce investments in countries where growth prospects are low and then transfer money to countries with higher growth prospects. These institutions sell out of their investment and the local currency, thus increasing supply of the currency and pushing down the money\u2019s worth. So, when a country or region has poor economic news, the value of the currency tends to fall. <\/small><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Construction activity and manufacturing activity both disappointed in August and analysts usually use these two readings as an indication as to what to expect for service sector activity data, which is released today. The service sector is the dominant contributor to the UK economy and analysts are expecting activity to have increased in August. Disappointing numbers in this sector spell trouble for the economy as a whole. This could pull the pound lower.<\/p>\n<p>The pound received a last-minute boost in the previous session thanks to rumours circulating that the EU will offer encouraging words to UK Prime Minister Theresa May over her Chequer\u2019s Brexit proposal. The evidence of progress should offer Theresa May some support as she faces rebelling Eurosceptic MP\u2019s. However, Brussels is also expected to give a stern warning over the Northern Ireland border issue and will want a plan within weeks. Pound traders focused on the positives from the message and the hopes of a softer Brexit.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th><small> Why is a \u201csoft\u201d Brexit better for sterling than a \u201chard\u201d Brexit? <\/small><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><small> 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. <\/small><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><a href=\"#euro-softer-despite-strong-ppi-data\" id=\"euro-softer-despite-strong-ppi-data\"><\/a>Euro Softer Despite Strong PPI Data<\/h2>\n<p>The euro traded broadly lower versus its peers in the previous session despite inflation figures at wholesale level coming in slightly better than analysts had forecast. Stronger inflation, as measured by producer price index, often indicates a pick up in consumer inflation down the line. Higher inflation increases the chances of an interest rate rise. This usually lifts the value of a currency.<\/p>\n<p>However, the euro was unable to move higher as investors continued to digest the disappointing manufacturing data from earlier in the week. Euro traders will now look towards today\u2019s eurozone retail sales data. This data will give an indication as to whether consumers are spending; strong spending is a good sign for the economy and could lift the euro higher.<\/p>\n<hr \/>\n<p><small><\/p>\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 had a volatile session on Tuesday. The pair had a rollercoaster day moving from a session low to a high of \u20ac1.1125 to low, before rallying higher into the close. What do these figures mean? When measuring the value of a pair of currencies, one set equals 1 unit and [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4850,"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-4849","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: Pound Ends Higher vs. Euro - Rumoured Progress Brexit Talks - 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\/100629-gbp-eur-rumoured-progress-brexit\/\" \/>\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\\\/100629-gbp-eur-rumoured-progress-brexit\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100629-gbp-eur-rumoured-progress-brexit\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Pound Ends Higher vs. Euro &#8211; 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