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Revived Hard-Brexit Fears Knock Pound Sterling to Euro Exchange Rate to Weekly Worst

Pound to Euro Exchange Rate Steadies after Hitting Fortnight Worst

Update 16:51 BST 07/09/2020:

The Pound Sterling to Euro (GBP/EUR) exchange rate steadied slightly on Monday afternoon, after hitting its worst levels since August.

GBP/EUR spent most of the day tumbling lower in reaction to fresh no-deal Brexit fears hitting the Pound.

GBP/EUR touched on a low of 1.1120 this afternoon, the worst level for the pair since late August.

The pair is trending slightly higher at the time of writing, but overall the Pound (GBP) has seen big losses. This is despite the Euro’s (EUR) appeal being dented by European Central Bank (ECB) uncertainty.

(Originally published 10:30 BST 07/09/2020)

Pound to Euro Exchange Rate Weaker ahead of This Week’s ECB and Growth Data

The Pound Sterling to Euro (GBP/EUR) exchange rate has seen mixed movement over the past week, as both currencies weakened. The Pound (GBP) is being kept under pressure this week though, with hard-Brexit fears returning.

Last week saw GBP/EUR close out the week fairly near to its opening levels, in the region of 1.1215.

It followed a week of volatility and shifts in movement. GBP/EUR briefly slipped to a low of 1.1156 earlier in the week but also touched on a 3-month-best of 1.1278 towards the end of the week.

This week so far though, GBP/EUR has been trending with a downside bias. After markets opened, the pair immediately tumbled and is currently trending in the region of 1.1167.

On the calendar for this week is the European Central Bank (ECB) policy decision. Upcoming Eurozone and UK growth data may also be influential.

Pound (GBP) Exchange Rates Knocked on Reports of UK Government Altering Brexit Deal

Last week saw Sterling mixed, as the currency reacted to movement in rivals. Its appeal was weighed by some dovish comments from Bank of England (BoE) officials as well.

However, the Pound has already come under fresh pressure this week. Markets are reacting to the latest Brexit developments, which have shocked Sterling investors.

Reportedly, the UK government is creating legislation to override the Brexit withdrawal deal on Northern Ireland.

The move has already come under criticism from Ireland and EU officials, and is being seen as making a no-deal outcome far more likely. With hard-Brexit fears returning to the Pound outlook, the currency’s resilience is weakening.

Euro (EUR) Exchange Rates Steady Ahead of European Central Bank (ECB)

After months of strong performance, the Euro (EUR) experienced a selloff last week. Investors sold the shared currency from its highest levels in profit-taking as markets reacted to EUR/USD hitting its best levels in two years.

However, the Euro remains fairly strong overall. Markets are more optimistic about the Eurozone’s coronavirus recovery outlook than the UK or US outlooks. This meant that the Euro selloff was fairly limited.

While the Euro is steadying today though, investors are anxious about this week’s upcoming European Central Bank (ECB) policy decision.

The bank is expected to discuss the Euro’s strength after its long period of gains. In recent weeks, ECB officials have indicated a strong Euro could influence monetary policy.

Pound to Euro (GBP/EUR) Exchange Rate Awaits Brexit and ECB Developments

Markets are becoming increasingly anxious about the latest Brexit developments. With Q3 heading to an end and no progress on Brexit, fears of a hard-Brexit outcome to this year’s UK-EU transition period may only intensify.

This could keep the Pound under pressure going forward. GBP/EUR may be in for further losses as markets begin to pay closer attention to Brexit again.

However, the Euro’s appeal could take another hit as well. Eurozone growth data tomorrow could be influential, but the European Central Bank’s (ECB) September policy decision on Thursday could be especially noteworthy.

If the ECB ramps up concerns about Euro strength, investors may opt to sell the shared currency.

Of course on top of this week’s domestic developments, coronavirus news will also remain influential.

If Britain’s coronavirus cases continue to surge, market anxiety could put even further weakness on the Pound to Euro (GBP/EUR) exchange rate.