Pound continues to test lows against the Euro
The pound to euro exchange rate has begun the week as it finished last week, which is under pressure and testing its recent lows. At the time of writing the pound to euro exchange rate is just above 1.09 which has remained a support level for the past week or so, but should the pound come under further pressure we could see the rate drop below this level.
Increased chance of no-deal Brexit weighs on the Pound
Since the appointment of Boris Johnson as Prime Minister the no-deal rhetoric has increased which could be why sterling is losing value. The outlook for the UK economy moving forward according to the Bank of England has also dropped off as announced by Mark Carney last week.
A number of prominent market commentators have now suggested that there is an increased chance of a no-deal Brexit which if it were to take place, it’s now less than 3-months away. Senior economists at Hermes Investment Management believe there is now a 50% chance, Deutsche Bank suggests a 45% chance and BNP Paribas has outlined a 40% chance of this taking place.
Economic data out this week that could affect GBP/EUR exchange rates
Economic data out of the UK this week is very light up until Friday when a raft of data will be released at 9.30am. The data releases include Manufacturing Production Figures, Industrial Production Figures, Trade Balance Figures and perhaps most importantly Gross Domestic Product figures. The GDP data will cover the 2nd quarter of 2019 and expectations are for growth to slow to 0% from the 0.5% that was recorded in the 1st quarter of this year. The slowdown is being attributed to Brexit risks and that fact that economic indicators have suggested a slowdown in the UK’s economy in recent months.
Sterling is losing value against the Euro at a time the Euro is coming under pressure. German Manufacturing is under pressure at the moment which is a key area of the German economy, so this is worth following for those of our readers planning on making a transfer between the pair soon.
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