{"id":5496,"date":"2019-05-22T00:00:00","date_gmt":"2019-05-22T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100986-gbp-eur-pound-low-after-speech\/"},"modified":"2019-05-22T00:00:00","modified_gmt":"2019-05-22T04:00:00","slug":"100986-gbp-eur-pound-low-after-speech","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100986-gbp-eur-pound-low-after-speech\/","title":{"rendered":"GBP\/EUR: Pound Depressed After PM Theresa May&#8217;s Brexit Speech"},"content":{"rendered":"<p>The pound spiked higher on Tuesday on hopes of a second referendum, before returning to negative territory post Prime Minister Theresa May\u2019s Brexit speech. The pound euro exchange rate rallied to a peak of \u20ac1.1459 before easing back towards \u20ac1.1380 for the close.<\/p>\n<table class=\"table table-bordered\">\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>Hopes of a second referendum sent the pound charging higher on Tuesday afternoon.<\/p>\n<p>However, Theresa May\u2019s desperate gamble to get her Brexit deal through Parliament fell flat, dragging the pound lower. Whilst Theresa May promised Parliament the option to vote on a second referendum, she made the offer conditional to ministers first backing her deal.<\/p>\n<p>The backlash from MP\u2019s started as soon as her speech had finished sending the pound tanking lower. Theresa May\u2019s fourth attempt to push her deal through Parliament looks destined to fail. Pound traders are growing increasingly concerned that Theresa May will be replaced by a pro-Brexit candidate meaning a no deal Brexit could be a very real option.<\/p>\n<table class=\"table table-bordered\">\n<tr>\n<th><small> Why is a \u201csoft\u201d Brexit better for sterling than a \u201chard\u201d Brexit? <\/small><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><small> 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. <\/small><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Today investors will continue to monitor developments in Westminster. They could also glance towards UK inflation data in the form of consumer price index. Analysts are expecting UK inflation to tick higher in April to 2.2%. This would be above the Bank of England\u2019s target of 2%.<\/p>\n<p>Under normal circumstances a central bank would hike interest rates to bring inflation back towards the target level. However, as the BoE have their hands tied over Brexit the pounds reaction to stronger inflation could be muted.<\/p>\n<table class=\"table table-bordered\">\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=\"#improved-eurozone-consumer-confidence-lifts-euro\" id=\"improved-eurozone-consumer-confidence-lifts-euro\"><\/a>Improved Eurozone Consumer Confidence Lifts Euro<\/h2>\n<p>The euro was broadly in favour in the previous session, thanks to an improvement in consumer confidence in the bloc. Data showed that consumer morale in the eurozone increased by 0.8 to -6.5 in May, its highest level in 7 months. Analysts had been expecting consumer confidence to remain depressed at -7.7.<\/p>\n<p>When consumers are confident, they spend more which helps to boost the economy. Therefore, the improvement in consumer confidence in the bloc could underpin modest economic growth in the bloc in the second quarter of the year. The data lifted the euro.<\/p>\n<p>There is no high impacting data today. Investors will look ahead to the release of the minutes from the latest European Central Bank policy meeting on Thursday.<\/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 spiked higher on Tuesday on hopes of a second referendum, before returning to negative territory post Prime Minister Theresa May\u2019s Brexit speech. The pound euro exchange rate rallied to a peak of \u20ac1.1459 before easing back towards \u20ac1.1380 for the close. What do these figures mean? When measuring the value of a pair [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":5497,"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-5496","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 Depressed After PM Theresa May&#039;s Brexit Speech - 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\/100986-gbp-eur-pound-low-after-speech\/\" \/>\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\\\/100986-gbp-eur-pound-low-after-speech\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100986-gbp-eur-pound-low-after-speech\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Pound Depressed After PM Theresa May&#8217;s Brexit Speech\",\"datePublished\":\"2019-05-22T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100986-gbp-eur-pound-low-after-speech\\\/\"},\"wordCount\":841,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100986-gbp-eur-pound-low-after-speech\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100588-gbp-eur-pound-low-after-speech.jpg\",\"keywords\":[\"eur\",\"gbp\"],\"articleSection\":[\"EUR\",\"GBP\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2019\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100986-gbp-eur-pound-low-after-speech\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100986-gbp-eur-pound-low-after-speech\\\/\",\"name\":\"GBP\\\/EUR: Pound Depressed After PM Theresa May's Brexit Speech - 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