Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Brexit Briefing: EUR/GBP Hits Four-Week Low

Brexit Briefing: EUR/GBP Hits Four-Week Low

Talking Points

- The day after the UK formally triggered Brexit, it was the Euro not the Pound that weakened.

- However, that had more to do with weak German inflation figures than a belief that Brexit is bad for the Euro-Zone.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

Given the tumble in the British Pound back in June last year, when the British people voted for Brexit, a further move down might have been expected when the UK gave formal notice of its intention to leave the EU. However, with the decision fully priced in to the markets, it was the Euro that fell against the Pound.

EUR/GBP dropped to its lowest level since March 3, almost four weeks ago, and EUR/USD was lower too. However, that was principally a reaction to German consumer price data that showed inflation at 1.6% in March, below the predicted 1.8% and down from 2.2% the month before.

That inevitably suggested that Euro-Zone monetary policy will remain accommodative for the foreseeable future and the Euro responded predictably.

Chart: EUR/GBP 5’ Timeframe (March 30 Intraday)

Chart by IG

The drop in EUR/GBP also came as the percentage of traders net long of the cross hit its highest level since February 25, according to IG client sentiment data.

As for Brexit, the only major development was the publication by the UK government of its “Great Repeal Bill” White Paper, setting out how it plans to replace, amend or scrap EU laws that currently apply to the UK. The bill would “end the supremacy” of EU law in the UK and deliver on the results of last year’s referendum, said UK Brexit Secretary David Davis.

Markets

Index / Exchange RateChange (Exchange Hours/GMT Session Rollover)Market Close/Last
FTSE 100-0.15%7,362
DAX+0.26%12,234
GBP/USD+0.52%1.2500
EUR/USD-0.31%1.0732
EUR/GBP-0.84%0.8586

Upcoming UK/EU Event Risk

EventsDate, Time (GMT)ForecastPrevious
German Retail Sales (MoM) (Feb)Mar 31, 06000.7%-0.8%
German Retail Sales (YoY) (Feb)Mar 31, 06000.4%2.3%
UK Nationwide House Prices s.a. (MoM) (Mar)Mar 31, 06000.3%0.6%
UK Nationwide House Prices (YoY) (Mar)Mar 31, 06004.0%4.5%
German Unemployment Change (Mar)Mar 31, 0755-10k-14k
German Unemployment Rate s.a. (Mar)Mar 31, 07555.9%5.9%
UK Current Account (Pounds) (4Q)Mar 31, 0830-16.0b-25.5b
UK GDP (QoQ) (4Q F)Mar 31, 08300.7%0.7%
UK GDP (YoY) (4Q F)Mar 31, 08302.0%2.0%
UK Index of Services (MoM) (Jan)Mar 31, 08300.2%0.2%
UK Index of Services (3Mo3M) (Jan)Mar 31, 08300.7%0.8%
UK Total Business Investment (QoQ) (4Q F)Mar 31, 0830-1.0%-1.0%
UK Total Business Investment (YoY) (4Q F)Mar 31, 0830-0.9%-0.9%
Euro-Zone Consumer Price Index Estimate (YoY) (Mar)Mar 31, 09001.8%2.0%
Euro-Zone CPI-Core (YoY) (Mar A)Mar 31, 09000.8%0.9%

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

Follow Martin on Twitter @MartinSEssex

Don't trade FX but want to learn more? Read the DailyFX Trading Guide

You can find more of our Brexit Briefings in the Special Reports section at the bottom of this page

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES