Over the week, speculation built that the Brexit deal would be signed off over the weekend. The GBP EUR rate has been climbing as a result. It now sits over a cent higher than a week ago giving clients an additional €1,500 on a £150,000 transfer if timed well over the last 7 days.

Currency Pair% Change in 1 monthDifference on £200,000
GBPEUR3.11%€7,000

Spain calls time on Gibraltar

In the final minutes of the Brexit vote last weekend, Spain threatened to veto the meeting over Gibraltar and its right to the ‘rock’. Theresa May ended up backing down to Madrid on the day before the meeting so the meeting could take place. On the eve of the special Brexit summit, the British Government conceded that Gibraltar would not necessarily be covered by future trade deal with the EU. This development really means that the Spanish can now veto any future deal concerning trade or security over Gibraltar, which by doing so opens the door for more conversations and the sovereignty of the territory.

This had little impact on the value of the GBP EUR rate due to the small economic input it provides to the overall GDP of the UK, however it is a large political change in tone.

Eurozone health and ECB policy put under pressure Generally European Economic health has continued to look sluggish and indeed weaken the euro value. Last week data showed a contraction in the service sector of both France and Germany, plus overall Manufacturing data also showed no growth. Business growth in the euro zone slowed much faster than expected and Germany, widely seen as the power house of the Eurozone, also raised reported private-sector growth slowing to its lowest level in nearly 4 years. Put on top of the ongoing dispute between Brussels and Italian around their budget next year, it results in a challenging time for the single currency moving forward.

Eurozone health and ECB policy put under pressure

Generally, European Economic health has continued to look sluggish and indeed weaken the euro's value. Last week data showed a contraction in the service sector for both France and Germany, plus overall Manufacturing data also showed no growth. Business growth in the euro zone slowed down more drastically than expected, and Germany, widely seen as the power house of the Eurozone, also reported private-sector growth slowing to its lowest level in nearly 4 years.

Add this to the ongoing dispute between Brussels and Italy around next year's budget, and we could see a challenging time for the single currency moving forward. 

Data this week for the Eurozone to watch

Economic data continues this week with further key indicators which could well have an impact on the value of the euro. Consumer Confidence and Business Climate data is due on Thursday and Unemployment and Consumer Price Index data on Friday. Both are expected to raise more alarm bells for the European Central Bank and their policies going forward into 2019.

As a result, I personally see the euro remaining under pressure and probably ending the week less valuable than where it starts.

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