{"id":5145,"date":"2018-12-21T00:00:00","date_gmt":"2018-12-21T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100788-gbp-eur-pound-falls-amid-warning\/"},"modified":"2018-12-21T00:00:00","modified_gmt":"2018-12-21T05:00:00","slug":"100788-gbp-eur-pound-falls-amid-warning","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100788-gbp-eur-pound-falls-amid-warning\/","title":{"rendered":"GBP\/EUR: Pound Falls vs. Euro Amid BoE Brexit Warnings"},"content":{"rendered":"<p>Euro strength thanks to dollar weakness and a cautious Bank of England sent the pound lower versus the euro on Thursday. The pound euro exchange rate tumbled to a nadir of 1.1046 in early trade before attempting to claw back ground across the day.<\/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>It has been a busy week for pound traders and the data was still flowing on Thursday. First UK retail sales came in much higher than analysts were expecting. Retail sales grew by 3.8% year on year in November, well up on the 2.3% predicted. The jump was in part due to a strong boost received from Black Friday sales. As wages rise and inflation falls the UK consumer is under less pressure. This has enabled them to spend which is good for the economy and points to higher inflation down the line. News that could encourage the BoE to hike rates sooner rather than later.<\/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>\n<p>However, the BoE made it clear that Brexit uncertainty was preventing them from taking any action. Policymakers voted unanimously to keep rates on hold. The central bank also warned that Brexit uncertainties had \u201cintensified\u201d over the past month. With no idea as to whether the UK was going to crash out of the EU without a deal, or whether it would leave in a more orderly fashion, the BoE gave no guidance as to how data was shaping monetary policy. A very unusual move by the BoE. However, with no idea what Brexit will look like, planning monetary policy is close to impossible.<\/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>Public sector net borrowing will be in focus today. Analysts are forecast a drop from \u00a38 billion to \u00a37 billion in November.<\/p>\n<h2><a href=\"#can-euro-remain-firm-ahead-of-consumer-confidence-data\" id=\"can-euro-remain-firm-ahead-of-consumer-confidence-data\"><\/a>Can Euro Remain Firm Ahead of Consumer Confidence Data?<\/h2>\n<p>The euro was in favour on Thursday owing the selloff in the dollar. The euro trades inversely to the dollar. This means that when the dollar moves lower the euro tends to move higher. The dollar was moving lower following the Federal Reserve\u2019s policy announcement on Wednesday evening.<\/p>\n<p>Euro traders will now look towards the GFK Consumer confidence data. Analysts are forecasting that confidence will drop again in January after declining more than expected the previous month.<\/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>Euro strength thanks to dollar weakness and a cautious Bank of England sent the pound lower versus the euro on Thursday. The pound euro exchange rate tumbled to a nadir of 1.1046 in early trade before attempting to claw back ground across the day. What do these figures mean? When measuring the value of a [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":5146,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1380,1379],"tags":[1395,1394],"class_list":["post-5145","post","type-post","status-publish","format-standard","has-post-thumbnail","category-eur","category-gbp","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 Falls vs. Euro Amid BoE Brexit Warnings - 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\/100788-gbp-eur-pound-falls-amid-warning\/\" \/>\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\\\/100788-gbp-eur-pound-falls-amid-warning\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100788-gbp-eur-pound-falls-amid-warning\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Pound Falls vs. Euro Amid BoE Brexit Warnings\",\"datePublished\":\"2018-12-21T05:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100788-gbp-eur-pound-falls-amid-warning\\\/\"},\"wordCount\":834,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100788-gbp-eur-pound-falls-amid-warning\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100788-gbp-eur-pound-falls-amid-warning.jpg\",\"keywords\":[\"eur\",\"gbp\"],\"articleSection\":[\"EUR\",\"GBP\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2018\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100788-gbp-eur-pound-falls-amid-warning\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100788-gbp-eur-pound-falls-amid-warning\\\/\",\"name\":\"GBP\\\/EUR: Pound Falls vs. Euro Amid BoE Brexit Warnings - 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