Monday, 16 January 2017

Pound/Euro exchange rate falls again

Good afternoon,

Since my last post the pound has been losing ground against the euro, with the GBP/EUR cross currently sitting at its lowest level since the start of November.

This morning saw the currency pair fall to a low of €1.1298, meaning the pound has fallen over three per cent since this time last week and almost six per cent since the beginning of December.

GBP/EUR graph




Why has the pound been falling?


Over the past few weeks talk of Brexit has been dominating the headlines and concerns are mounting over the short-term future of the UK economy.

In an interview with Sky News last week, UK Prime Minister Theresa May hinted that she will look to cut all ties with the European Union and that we could not keep "bits of membership".

Those comments have continued to weigh on the value of the pound into this week, and with May set to deliver a speech tomorrow, investors are preparing themselves for the PM to announce that she will be pushing ahead with a "hard Brexit" by giving up the UK's access to the single market.

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