The Pound starts the week on the back foot against the Euro, Dollar and other major currencies. After the recent and temporary appreciation in the Pound we are once again trading at familiar levels amid speculation that UK-EU trade talks could soon weigh heavier on the pound.
GBP/USD rose towards the back end of last week from lows of 1.2872. This was due to the January retail sales figures as well as February’s Manufacturing PMI data, which both showed positive results for the UK and helped the Pound recover, although not enough to get back above the key level of 1.30. Fears over UK-EU trade talks coupled with growing concerns about the global economic impact of the coronavirus outbreak kept a lid on any strong follow-through movements above 1.30. In the absence of any key economic releases, from either the UK or the US, the incoming Brexit-related headlines will play a key role in influencing short-term movements in the pair.
GBP/EUR has started this week on the back foot, after upbeat German IFO data says "The German economy is not affected by coronavirus". Despite some minor early movements, the pair is trading at relatively familiar levels just above 1.19 as investors focus on the upcoming UK-EU trade talks due to start in March. As with GBP/USD there is no major economic data out for the GBP/EUR pair this week, which will mean that the tone of the Brexit negotiations and other international factors are expected to drive price over the coming days. Despite official trade talks not starting until next month, the build-up has seen some both sides set out their agenda which has been confrontational at times.
EUR/USD has somewhat eased on recent losses, which is in part due to positive economic data out of the EU, in particular, the PMI data out of Germany. Germany’s data shows encouraging signs of pulling out of a potential recession and suggests that concerns of China’s coronavirus haven’t materialized into business confidence data yet. The movement was further helped by a positive statement from IFO a leading thinktank in Germany.
At the time of writing:
GBP/USD – 1.2898
GBP/EUR - 1.1926
EUR/USD - 1.0813
The figures are based on the live mid-market rate, correct as of 10:40 GMT on 24/02/2020, and are provided for indicative purposes only. Live mid-market rates are not available to consumers and are for informational purposes only. The rates we quote for money transfer can be selected via the page on our website ‘Live Money Transfer rates’.
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