GBP/EUR: Pound Drops A Theresa May Prepares To Leave

The pound euro exchange rate rebounded in the previous session after falling to a 23-month low on Monday. The pair rallied to a high of €1.0922 on Tuesday. However, gains were short lived, and the pair was trading lower once again in early trade on Wednesday.

What do these figures mean?
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’s positive for the pound. 


1 EUR = 0.87271 GBP


The pound was in favor in the previous session despite no deal Brexit fears. Both the EU and the UK are digging their heels in over the Withdrawal Agreement. The EU is now considering a no deal Brexit the most likely outcome on 31st October.

Meanwhile opposition to a no deal Brexit continues to gather momentum among politicians. Leader of the opposition Jeremy Corbyn is planning a no confidence vote against Boris Johnson for early September. Pro-remain MPs are considering forming a cross party coalition with the sole purpose of extending Article 50 again and delaying the UK’s exit from the EU. Usually more political uncertainty would weigh on the pound. However, given that it could mean that a disorderly Brexit is avoided, the pound is moving higher.


Today the only economic data on the UK calendar is Halifax house price figures. Higher house prices indicate a more confident consumer and economy. Meanwhile falling house prices point towards a more troubled picture.

Euro Gains Despite Mixed German Data

The euro failed to react to stronger than forecast German factory data in the previous session. Data showed that German factory orders rebounded in June, increasing 2.5% month on month, well above the 0.5% increase forecast and -2.5% decline in May. Stronger factory orders could indicate stronger economic growth in Germany. This was some rare relief for the eurozone’s largest economy after a recent stream of poor data.

German factory orders received a boost from foreign orders, up 5% while domestic orders fell 1%. Orders from countries outside the eurozone increased 8.6% whilst orders from the bloc declined 0.6%. This suggests that the biggest problem for German industry may not be the weakening global economy but a weakening eurozone economy.

Today the focus will remain on Germany with German industrial production showing a larger than forecast decline. The euro has barley reacted as German industrial production declined by -1.5% month on month in June, well ahead of -0.5% decline forecast. Weak data usually hits demand for a currency.

Why does poor economic data drag on a country’s currency?


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