{"id":5630,"date":"2019-07-10T00:00:00","date_gmt":"2019-07-10T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/101053-gbp-eur-pressure-on-pound\/"},"modified":"2019-07-10T00:00:00","modified_gmt":"2019-07-10T04:00:00","slug":"101053-gbp-eur-pressure-on-pound","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101053-gbp-eur-pressure-on-pound\/","title":{"rendered":"GBP\/EUR: Pound Under Pressure Post Johnson\/Hunt Debate"},"content":{"rendered":"<p>Pound traders aren\u2019t able to shake off Brexit uncertainty and recession fears. The pound sunk versus the euro to a low of \u20ac1.1108 on Tuesday. This is the lowest that the pound has traded at versus the euro in 6 months.<\/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>Concerns over a disorderly Brexit combined with recession fears sent the pound lower in the previous session. Last week\u2019s data heightened concerns that the UK economy contracted in the second quarter. Data so far this week has supported the idea that the UK economy is slowing sharply.<\/p>\n<p>The British Retail Consortium reported retail sales falling -1.6% year on year, the latest sign that the UK consumer is holding back on spending. Any wage rises that are being reported are not being reflected at the tills. Given the UK\u2019s dominance on the service sector this is concerning.<\/p>\n<p>The weak data came as investors look ahead to today\u2019s GDP reading. Analysts are now predicting a contraction of -0.1% in the second quarter, this is down from the previously forecast 0% growth. More and more indicators are pointing to the UK economy contracting, as Brexit uncertainty hits confidence.<\/p>\n<p>Boris Johnson stepping up his no deal Brexit rhetoric on last night\u2019s live TV debate with Jeremy Hunt, did little to calm no deal nerves. Johnson refused to rule out suspending Parliament to push Brexit through without a deal.<\/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=\"#euro-holds-steady-in-quiet-session\" id=\"euro-holds-steady-in-quiet-session\"><\/a>Euro Holds Steady In Quiet Session<\/h2>\n<p>The euro was holding its ground versus its peers in the previous session. With no data yesterday or today for euro investors to focus on, their attention switched to European Central Bank (ECB) policymakers. ECB\u2019s Lane held a Q and A session on Tuesday and was clear that the ECB have the tools if more monetary policy easing is needed. Lane also said that whilst he sees the eurozone economy weakening, he does not consider it in danger of entering recession. This at least puts the eurozone economy ahead of the UK economy.<\/p>\n<p>Today there is no high impacting economic data. Instead investors will be waiting for Federal Reserve Chair Powell as he gives a semi-annual testimony to Congress. The euro moves inversely to the dollar. Investors are expecting Fed Powell to give an indication as to whether the Fed are looking to cut interest rates in July and thereafter. Any sign of a cut could drag the dollar lower, boosting the euro.<\/p>\n<table class=\"table table-bordered\">\n<tr>\n<th><small> Why do interest rate cuts drag on 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. Lower interest rate environments tend to offer lower yields. So, if the interest rate or at least the interest rate expectation of a country is relatively lower compared to another, then foreign investors look to pull their capital out and invest elsewhere. Large corporations and investors sell out of local currency to invest elsewhere. More local currency is available as the demand of that currency declines, dragging the value lower. <\/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>Pound traders aren\u2019t able to shake off Brexit uncertainty and recession fears. The pound sunk versus the euro to a low of \u20ac1.1108 on Tuesday. This is the lowest that the pound has traded at versus the euro in 6 months. What do these figures mean? When measuring the value of a pair of currencies, [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":5631,"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-5630","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 Under Pressure Post Johnson\/Hunt Debate - 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\/101053-gbp-eur-pressure-on-pound\/\" \/>\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\\\/101053-gbp-eur-pressure-on-pound\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101053-gbp-eur-pressure-on-pound\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/EUR: Pound Under Pressure Post Johnson\\\/Hunt Debate\",\"datePublished\":\"2019-07-10T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101053-gbp-eur-pressure-on-pound\\\/\"},\"wordCount\":881,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101053-gbp-eur-pressure-on-pound\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100656-gbp-eur-pressure-on-pound.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\\\/101053-gbp-eur-pressure-on-pound\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101053-gbp-eur-pressure-on-pound\\\/\",\"name\":\"GBP\\\/EUR: Pound Under Pressure Post Johnson\\\/Hunt Debate - 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