{"id":5089,"date":"2018-12-03T00:00:00","date_gmt":"2018-12-03T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100755-pound-under-spotlight-brexit\/"},"modified":"2018-12-03T00:00:00","modified_gmt":"2018-12-03T05:00:00","slug":"100755-pound-under-spotlight-brexit","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100755-pound-under-spotlight-brexit\/","title":{"rendered":"GBP\/EUR: Pound Under Spotlight As Brexit Tensions Heat Up"},"content":{"rendered":"<p>Amid disappointing eurozone data and Brexit uncertainty the pound euro exchange rate dropped 0.2% lower across the previous week. After opening the previous week at \u20ac1.1308, the pound dropped to a low of \u20ac1.1206, before closing the week \u20ac1.1265.<\/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.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.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Brexit fears were responsible for sending the pound lower versus the euro. UK Prime Minister Theresa May spent the past week trying to win support for her Brexit deal. At the same time UK government economists and the Bank of England warned over the economic impact of Brexit, deal or no deal. Whilst Brexit with a deal was shown to slow the economy, the central bank highlighted the severity of a no deal Brexit, predicating the worst economic slowdown since World War II.<\/p>\n<p>The week Theresa May will once again be attempting to drum up support for her deal. Given the eye-opening statistics from last week, more signs of the deal not being voted through Parliament could weigh heavily on the pound.<\/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>\n<p>There have been signs of some Remainers on the cabinet, such as Michael Gove, backing Theresa May. The fear is that if this Brexit plan doesn\u2019t go through Parliament, then a second referendum will be called.<\/p>\n<p>This week the UK economic calendar is sparse. The main releases will be UK industry activity reports, in the form of the purchasing manager index (pmi) report. Today, aside from Brexit headlines, investors will look towards the UK manufacturing pmi. Analysts expect the pmi to have ticked up to 51.7 in November from 51.1 in October. Stronger numbers could boost the pound.<\/p>\n<h2><a href=\"#euro-to-trade-at-the-will-of-the-post-g20-dollar\" id=\"euro-to-trade-at-the-will-of-the-post-g20-dollar\"><\/a>Euro To Trade At The Will Of The Post G20 Dollar<\/h2>\n<p>Investors had little reason to buy into the euro last week. Even so the euro still managed to move higher versus the weaker pound. Eurozone economic data across the previous week was disappointing. German retail sales and eurozone inflation both missed analyst expectations. These data misses fuel concerns over the slowing momentum in the eurozone economy.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why does poor economic data drag on a country\u2019s currency?<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>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.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>As trading begins for the new week, the euro is likely to be driven by movement in the dollar following the G20 summit. Given that the euro trades inversely to the dollar, a weaker dollar on easing geopolitical tensions could boot the euro.<\/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>Amid disappointing eurozone data and Brexit uncertainty the pound euro exchange rate dropped 0.2% lower across the previous week. After opening the previous week at \u20ac1.1308, the pound dropped to a low of \u20ac1.1206, before closing the week \u20ac1.1265. What do these figures mean? When measuring the value of a pair of currencies, one set [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":5090,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379],"tags":[1386,1394],"class_list":["post-5089","post","type-post","status-publish","format-standard","has-post-thumbnail","category-gbp","tag-brexit","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 Under Spotlight As Brexit Tensions Heat Up - 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\/100755-pound-under-spotlight-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\\\/100755-pound-under-spotlight-brexit\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100755-pound-under-spotlight-brexit\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Pound Under Spotlight As Brexit Tensions Heat Up\",\"datePublished\":\"2018-12-03T05:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100755-pound-under-spotlight-brexit\\\/\"},\"wordCount\":834,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100755-pound-under-spotlight-brexit\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100755-pound-under-spotlight-brexit.jpg\",\"keywords\":[\"Brexit\",\"gbp\"],\"articleSection\":[\"GBP\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2018\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100755-pound-under-spotlight-brexit\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100755-pound-under-spotlight-brexit\\\/\",\"name\":\"GBP\\\/EUR: Pound Under Spotlight As Brexit Tensions Heat Up - 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