{"id":5580,"date":"2019-06-21T00:00:00","date_gmt":"2019-06-21T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/101028-gbp-eur-brexit-lead-battle\/"},"modified":"2019-06-21T00:00:00","modified_gmt":"2019-06-21T04:00:00","slug":"101028-gbp-eur-brexit-lead-battle","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101028-gbp-eur-brexit-lead-battle\/","title":{"rendered":"GBP\/EUR: Pound Drops And Final Stage Of Brexit Leadership Battle"},"content":{"rendered":"<p>The Bank of England (BoE) lowering the growth outlook for the UK sent the pound sharply lower versus the euro on Thursday. The pound gave back gains from Wednesday, dropping to a low of \u20ac1.1215 versus the euro from a high of \u20ac1.1271. The pound slipped lower versus the euro in early trade on Friday.<\/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>As analysts forecast, the Bank of England voted unanimously to keep monetary policy unchanged. Key interest rates remain at 0.75%. The BoE didn\u2019t join other central banks around the globe, such as the Federal Reserve or the European Central Bank, with a more cautious outlook. It did however acknowledge that \u201cdownside risks to growth have increased\u201d in the UK and across the globe, citing trade and Brexit. The BoE reduced Q2 GDP forecast to 0 from 0.2%.<\/p>\n<p>Whilst the BoE still sees the need for an interest rate rise in the coming years, should their forecasts bear out, they also acknowledged that the possibility of a no deal Brexit was on the increase. Furthermore, with Brexit delayed until 31st October the BoE doesn\u2019t expect to see investment pick up before then. The overall tone was more cautious but stopped well short of the dovish sounding Fed and ECB.<\/p>\n<p>Attention then moved to the Conservative Leadership battle. Brexiteer Boris Johnson will now face former Remainer Jeremy Hunt in the final stage. The results will be revealed in July. A win for Johnson could see the pound fall as fears of a no deal Brexit grow.<\/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<h2><a href=\"#weak-dollar-aides-euro-recovery\" id=\"weak-dollar-aides-euro-recovery\"><\/a>Weak Dollar Aides Euro Recovery<\/h2>\n<p>The euro soared across the board on Thursday, thanks to a dovish Fed, making up for European Central Bank (ECB) inspired losses earlier in the week. The euro trades inversely to the US dollar. The US dollar tanked in the previous session after the Federal Reserve indicated that it might loosen monetary policy and cut interest rates. This was a dovish shift after the Fed had been insisting on remaining patient for the last few months.<\/p>\n<p>The Federal Reserve effectively joined the ECB with a more cautious tone, enabling the euro to regain some of the lost ground from earlier in the week.<\/p>\n<p>Today euro traders will turn their attention back to the eurozone economy for PMI data. German manufacturing activity will be watched closely as it remains deeply in contraction. Signs that the weakness in the sector is easing could help lift the euro.<\/p>\n<table class=\"table table-bordered\">\n<tr>\n<th><small> Why does poor economic data drag on a country\u2019s currency? <\/small><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><small> Slowing economic indicators point to a slowing economy. Weak economies have weaker currencies because institutions look to reduce investments in countries where growth prospects are low and then transfer money to countries with higher growth prospects. These institutions sell out of their investment and the local currency, thus increasing supply of the currency and pushing down the money\u2019s worth. So, when a country or region has poor economic news, the value of the currency tends to fall. <\/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 Bank of England (BoE) lowering the growth outlook for the UK sent the pound sharply lower versus the euro on Thursday. The pound gave back gains from Wednesday, dropping to a low of \u20ac1.1215 versus the euro from a high of \u20ac1.1271. The pound slipped lower versus the euro in early trade on Friday. [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":5581,"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-5580","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 Drops And Final Stage Of Brexit Leadership Battle - 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\/101028-gbp-eur-brexit-lead-battle\/\" \/>\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\\\/101028-gbp-eur-brexit-lead-battle\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101028-gbp-eur-brexit-lead-battle\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Pound Drops And Final Stage Of Brexit Leadership Battle\",\"datePublished\":\"2019-06-21T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101028-gbp-eur-brexit-lead-battle\\\/\"},\"wordCount\":865,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101028-gbp-eur-brexit-lead-battle\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100630-gbp-eur-brexit-lead-battle.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\\\/101028-gbp-eur-brexit-lead-battle\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101028-gbp-eur-brexit-lead-battle\\\/\",\"name\":\"GBP\\\/EUR: Pound Drops And Final Stage Of Brexit Leadership Battle - 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