{"id":5227,"date":"2019-01-29T00:00:00","date_gmt":"2019-01-29T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100830-gbp-eur-brexit-vote-eu-uk\/"},"modified":"2019-01-29T00:00:00","modified_gmt":"2019-01-29T05:00:00","slug":"100830-gbp-eur-brexit-vote-eu-uk","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100830-gbp-eur-brexit-vote-eu-uk\/","title":{"rendered":"GBP\/EUR: Brexit Vote Nerves Send Pound Lower vs. Euro"},"content":{"rendered":"

Increased investor confidence that the UK would not crash out of the EU without a deal the pound rally over the past 4 weeks. After Theresa May\u2019s Brexit deal was crushed in the House of Commons, investors were increasingly certain that Parliament would delay Brexit rather than allow a no deal Brexit.<\/p>\n\n\n\n\n\n
What do these figures mean?<\/th>\n<\/tr>\n<\/thead>\n
\n

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

For example, it could be written: 1 GBP = 1.13990 EUR<\/em> <\/p>\n

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

Or, if you were looking at it the other way around: 1 EUR = 0.87271 GBP<\/em> <\/p>\n

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>\n

Today the House of Commons will vote again on Brexit, this time on Theresa May\u2019s Brexit plan B. This vote could change the course of Brexit. There are two rival sides in Parliament. If one wins then Theresa May will be sent back to Brussels to renegotiate the Irish backstop; the most controversial part of the deal. Should the other side win, Brexit will most likely be delayed.<\/p>\n

The probability of each side claiming victory is dependent on which amendments are selected to be voted on. Any signs that the UK is moving further away from a no deal, hard Brexit could give the pound a lift.<\/p>\n\n\n\n\n\n
Why is a \u201csoft\u201d Brexit better for sterling than a \u201chard\u201d Brexit?<\/th>\n<\/tr>\n<\/thead>\n
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

<\/a>Euro Resilient As Draghi Sticks To Familiar Message<\/h2>\n

The euro traded relatively flat in the previous session, as European Central Bank (ECB) President Mario Draghi repeated his message from last week, with no new surprises. Draghi confirmed that economic data from the eurozone area had been weakening, as he addressed the European Parliament in Brussels. He once again suggested that risks to the economy were moving to the downside, owing to softer external demand and some country specific factors. However, which he said that the eurozone economic outlook was bleaker than he had originally expected, he did not believe it warranted any additional monetary support.<\/p>\n

This was enough to keep euro investors happy. Whilst Draghi didn\u2019t discuss tightening monetary policy, through hiking interest rates, at least he doesn\u2019t believe loosening monetary policy is necessary.<\/p>\n\n\n\n\n\n
Why do raised interest rates boost a currency\u2019s value?<\/th>\n<\/tr>\n<\/thead>\n
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

There is no high impacting eurozone economic data today. The euro will move at the will of the pound.<\/p>\n

\n

<\/p>\n


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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":"

Increased investor confidence that the UK would not crash out of the EU without a deal the pound rally over the past 4 weeks. After Theresa May\u2019s Brexit deal was crushed in the House of Commons, investors were increasingly certain that Parliament would delay Brexit rather than allow a no deal Brexit. What do these […]<\/p>\n","protected":false},"author":163946597,"featured_media":5228,"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-5227","post","type-post","status-publish","format-standard","has-post-thumbnail","category-eur","category-gbp","tag-brexit","tag-eur","tag-gbp"],"acf":[],"yoast_head":"\nGBP\/EUR: Brexit Vote Nerves Send Pound Lower vs. Euro - 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\/100830-gbp-eur-brexit-vote-eu-uk\/\" \/>\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\\\/100830-gbp-eur-brexit-vote-eu-uk\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100830-gbp-eur-brexit-vote-eu-uk\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Brexit Vote Nerves Send Pound Lower vs. Euro\",\"datePublished\":\"2019-01-29T05:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100830-gbp-eur-brexit-vote-eu-uk\\\/\"},\"wordCount\":814,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100830-gbp-eur-brexit-vote-eu-uk\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100830-gbp-eur-brexit-vote-eu-uk.jpg\",\"keywords\":[\"Brexit\",\"eur\",\"gbp\"],\"articleSection\":[\"EUR\",\"GBP\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2019\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100830-gbp-eur-brexit-vote-eu-uk\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100830-gbp-eur-brexit-vote-eu-uk\\\/\",\"name\":\"GBP\\\/EUR: Brexit Vote Nerves Send Pound Lower vs. Euro - 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