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Pound Sterling to Euro Exchange Rate Edges Higher despite Brexit Uncertainty Dominating Outlook

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Pound to Euro Exchange Rate Rising from Lows as Eurozone PMIs Show Misses

Last week saw the Pound Sterling to Euro (GBP/EUR) exchange rate touch on its worst levels in five months as Brexit jitters continued to keep pressure on the Pound (GBP), but weakness in the Euro (EUR) has helped the pair to edge higher this week.

Due to persisting no-deal Brexit fears and some stronger than expected Eurozone data, GBP/EUR trended with a downside bias last week after opening the week at the level of 1.1200.

Towards the end of the week, GBP/EUR briefly touched on a fresh low of 1.1127 which was the worst level for the pair since January. GBP/EUR ultimately closed the week lower, at the level of 1.1169.

Since markets opened this morning, GBP/EUR briefly saw modest gains, but its gains were limited and the pair trended just above the week’s opening levels.

This has been largely due to fresh strength in the US Dollar (USD) making investors less eager to hold onto its rival the Euro (EUR).

Pound (GBP) Exchange Rates Lack Drive as Brexit Uncertainties Persist

The Pound has been climbing this morning, but this has been more due to weakness in the Euro than any notable support in the Pound.

Most recent UK data has been relatively low-influence, and investors remain anxious about the Brexit outlook and whether or not a no-deal Brexit will become reality.

Boris Johnson, the frontrunner in the ongoing Conservative Party leadership contest, has repeatedly said he would aim for a no-deal Brexit instead of delaying the process again.

No-deal Brexit concerns have only risen this week so far, as his opponent in the contest, Jeremy Hunt, indicated in fresh comments that he was also willing to go through with a no-deal Brexit.

He also claimed that he would deliver Brexit at an earlier date than Johnson would.

Sterling was a little weaker following the publication of Britain’s June manufacturing PMI, which printed a deeper than expected contraction.

Euro (EUR) Exchange Rates Unappealing amid Rising Trade Hopes and Weaker Eurozone Data

The Euro was one of the weaker major currencies when markets opened today, as investors reacted to the weekend’s developments from the G20 Summit in Osaka.

US President Donald Trump and China President Xi Jinping agreed to put a pause on escalation of trade tariffs and restart trade deal negotiations once again.

Markets were heavily relieved by the news. It led to hopes that both trade-heavy nations and the US would have slightly more resilient economic outlooks if trade tensions were not going to worsen further.

As the US Dollar (USD) is the Euro’s biggest currency rival and the two often see negatively correlated movement, the US Dollar’s strength in reaction to the news put fresh pressure on the Euro this morning.

This morning’s Eurozone data failed to offer the Euro much support either.

Markit’s final June manufacturing PMI fell short of forecasts in many notable prints, including French, German and the overall Eurozone prints.

These stats made investors more doubtful that the Eurozone’s economic activity was more resilient than expected.

Pound to Euro (GBP/EUR) Exchange Rate Investors Await Further Eurozone Data

While the biggest movements this morning came from geopolitical trade developments, the Euro’s (EUR) outlook could be influenced further by Eurozone data for most of the week.

With the Pound (GBP) outlook still filled with uncertainties amid Brexit and political jitters, the British currency’s movement is likely to be limited in response to data this week.

Pound to Euro (GBP/EUR) exchange rate investors will be paying close attention to tomorrow’s German retail sales results from May, followed by Eurozone services and composite PMI stats on Wednesday.

Britain’s services PMI will be published on Wednesday as well, and this has the best chance of influencing the Pound’s movement out of any UK data this week.

Overall Eurozone retail sales results from May will be published on Thursday.

Further developments in UK politics or US trade tensions could of course influence Pound to Euro (GBP/EUR) exchange rate movement over the coming week.