{"id":5327,"date":"2019-03-06T00:00:00","date_gmt":"2019-03-06T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100882-gbp-eur-pound-falls-brexit-news\/"},"modified":"2019-03-06T00:00:00","modified_gmt":"2019-03-06T05:00:00","slug":"100882-gbp-eur-pound-falls-brexit-news","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100882-gbp-eur-pound-falls-brexit-news\/","title":{"rendered":"GBP\/EUR: Gloomy Brexit News Weigh On Pound vs. Euro"},"content":{"rendered":"<p>The pound dropped versus the euro in early trade on Tuesday, before Bank of England (BoE) paring losses and climbing back up to the flatline. The pound euro exchange rate dipped to a low of \u20ac1.1566 before closing back up at \u20ac1.163. The pound is once again moving lower versus the euro in early trade on Wednesday.<\/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. 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>Pound traders had UK service sector data and Brexit headlines to digest in the previous session. UK service sector data unexpectedly jumped higher in February to a level of 51.3. This was well above the 50.1 level in January. Whilst this reading was better than analysts had expected, the sector is almost grinding to a halt. Delving deeper into the numbers there were some areas of concern which spooked investors. For example, employment growth in the sector was the slowest in 7 years as business put off hiring decisions until Brexit. This is not good news for the economy.<\/p>\n<p>Brexit headlines have been more gloomy,, denting demand for the pound. As the UK Attorney General headed over to Brussels to try to secure concessions, reports surfaced that no imminent breakthrough in Brexit talks was expected. Should Theresa May return to Parliament without the requested changes to the Irish backstop arrangement she is unlikely to win the meaningful vote.<\/p>\n<p>The pound finally picked up again at the end of the day after Bank of England Governor Mark Carney said that UK interest rates may not be high enough. His comment came as he testified before the House of Lords. Pound investors interpreted this as the BoE saying it could hike interest rates higher. This lifted the pound, however the effects have been short lived, with the pound dropping in early trade today.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th><small> Why do raised interest rates boost a currency\u2019s value? <\/small><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><small> 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. <\/small><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><a href=\"#eurozone-data-improves\" id=\"eurozone-data-improves\"><\/a>Eurozone Data Improves<\/h2>\n<p>The euro was in favour for much of the previous session. A slew of strong data from the eurozone helped boost demand for the common currency. Retail sales in the bloc increased 1.3% in January, after picking up from a dismal December, where retail sales decreased -1.4%.<\/p>\n<p>Data for Italy was also significantly better than analysts had been expecting. Italian GDP posted a smaller decline that what market participants had been forecasting and the service sector returned to growth in February. The fact that the Italian economy might be less sickly than originally thought is helping the euro.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th><small> Why does strong economic data boost a country\u2019s currency? <\/small><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><small> Solid economic indicators point to a strong economy. Strong economies have strong currencies because institutions look to invest in countries where growth prospects are high. These institutions require local currency to invest in the country, thus increasing demand and pushing up the money\u2019s worth. So, when a country or region has good economic news, the value of the currency tends to rise. <\/small><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\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 dropped versus the euro in early trade on Tuesday, before Bank of England (BoE) paring losses and climbing back up to the flatline. The pound euro exchange rate dipped to a low of \u20ac1.1566 before closing back up at \u20ac1.163. The pound is once again moving lower versus the euro in early trade [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":5328,"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-5327","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: Gloomy Brexit News Weigh On Pound 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\/100882-gbp-eur-pound-falls-brexit-news\/\" \/>\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\\\/100882-gbp-eur-pound-falls-brexit-news\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100882-gbp-eur-pound-falls-brexit-news\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Gloomy Brexit News Weigh On Pound vs. Euro\",\"datePublished\":\"2019-03-06T05:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100882-gbp-eur-pound-falls-brexit-news\\\/\"},\"wordCount\":811,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100882-gbp-eur-pound-falls-brexit-news\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100882-gbp-eur-pound-falls-brexit-news.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\\\/100882-gbp-eur-pound-falls-brexit-news\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100882-gbp-eur-pound-falls-brexit-news\\\/\",\"name\":\"GBP\\\/EUR: Gloomy Brexit News Weigh On Pound vs. Euro - 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