{"id":5339,"date":"2019-03-11T00:00:00","date_gmt":"2019-03-11T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100888-gbp-eur-pound-tumbles-brexit\/"},"modified":"2019-03-11T00:00:00","modified_gmt":"2019-03-11T04:00:00","slug":"100888-gbp-eur-pound-tumbles-brexit","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100888-gbp-eur-pound-tumbles-brexit\/","title":{"rendered":"GBP\/EUR: Pound Tumbles Ahead Of Uncertain Brexit End-Game"},"content":{"rendered":"<p>The pound fell sharply against the euro at the end of last week. The pound euro exchange rate fell 0.9% on Friday. This mean that the rate fell 0.2% across the week, closing at \u20ac1.1581. The pound was extending losses versus the euro at the start of the new week.<\/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>\n<p> 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<p> For example, it could be written: <em>1 GBP = 1.13990 EUR<\/em> <\/p>\n<p> <em>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<p> Or, if you were looking at it the other way around: <em>1 EUR = 0.87271 GBP<\/em> <\/p>\n<p> <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.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>UK economic data painted a dismal picture, last week, weighing on the value of the pound. The UK construction sector slipped into contraction in February, whilst the UK manufacturing sector slowed once again. Activity in the dominant UK service sector increased in February although remains close to a standstill.<\/p>\n<p>In addition to weak data, Brexit anxieties also hit demand for the pound. UK Prime Minister Theresa May made a last-ditch attempt to secure the legally binding changes to the Irish backstop arrangement that Parliament requested.<\/p>\n<p>This week is a big week for Brexit and the pound. UK Parliament will vote on a series of Brexit bills which will decide the future course of Brexit. The meaningful vote will take place on Tuesday. Political commentators expect Theresa May\u2019s Brexit vote to be defeated for a second time in the House of Commons. They expect the margin to be slimmer than the 230 votes last time.<\/p>\n<p>Should the deal be rejected, Parliament will vote on a no deal Brexit on Wednesday. Should that be defeated ministers will vote on extending Article 50 on Thursday. Any moves towards a softer Brexit could help boost the pound. A move towards a hard no deal Brexit could pull the pound sharply lower.<\/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<h2><a href=\"#will-german-industrial-data-pull-euro-lower\" id=\"will-german-industrial-data-pull-euro-lower\"><\/a>Will German Industrial Data Pull Euro Lower?<\/h2>\n<p>Dovish words from European Central Bank President Mario Draghi, hit demand for the euro in the previous week. The central bank downgraded its outlook for inflation and growth across the bloc for this year and next. Additionally, Draghi said that the ECB would not be looking to raise interest rates until 2020, later than the initial plan for summer 2019. As interest rate expectations were pushed back, the euro declined.<\/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>The euro received a boost on Friday as the dollar dived on weak jobs data. The euro trades inversely to the dollar. When the dollar declines the euro rallies.<\/p>\n<p>German industrial production data will be in focus today. Germany\u2019s industrial sector has been badly hit by slowing global growth and Brexit. Market participants will be keen to see asses the health of the sector in Europe\u2019s largest economy.<\/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 fell sharply against the euro at the end of last week. The pound euro exchange rate fell 0.9% on Friday. This mean that the rate fell 0.2% across the week, closing at \u20ac1.1581. The pound was extending losses versus the euro at the start of the new week. What do these figures mean? [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4455,"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-5339","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 Tumbles Ahead Of Uncertain Brexit End-Game - 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\/100888-gbp-eur-pound-tumbles-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\\\/100888-gbp-eur-pound-tumbles-brexit\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100888-gbp-eur-pound-tumbles-brexit\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Pound Tumbles Ahead Of Uncertain Brexit End-Game\",\"datePublished\":\"2019-03-11T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100888-gbp-eur-pound-tumbles-brexit\\\/\"},\"wordCount\":896,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100888-gbp-eur-pound-tumbles-brexit\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100415-gbp-eur-euro-uk-eu-pmi-data.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\\\/100888-gbp-eur-pound-tumbles-brexit\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100888-gbp-eur-pound-tumbles-brexit\\\/\",\"name\":\"GBP\\\/EUR: Pound Tumbles Ahead Of Uncertain Brexit End-Game - 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