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‘Brexit’ Warning Sends EUR GBP Exchange Rate Higher in First Week of 2017

  • EUR GBP Bolstered by ‘Brexit’ Concerns – Former UK official warns Britain will be unable to pay for access to single market.
  • Eurozone Retail Figures – Euro rises as Sales beat expectations.
  • Euro May Rise Following US Data – Fall in US employment may increase demand for single currency.

The EUR GBP exchange rate continued rising today following a warning that the UK government will not be able to pay for access to the single market.

Euro Pound (EUR GBP) Advances Following ‘Brexit’ Warning

The Euro Pound (EUR GBP) exchange rate has climbed following a warning from Jonathan Faull, a former top UK official in Brussels, who says that the British government will not be able to buy its way into the single market.

Faull, who retired last week has rejected claims from some members of government that the UK would be able to pay for continued access to the EU’s single market, saying;

‘Can you buy access to the single market? It’s not something that’s on sale in that way. I find that rather extraordinary.’

The idea, floated by ‘Brexit’ Secretary David Davis, would allow Britain to circumvent the rules that would require it to accept freedom of movement in order to access Europe’s free market, despite EU officials repeatedly denying this would be a possibility.

Meanwhile Lord Patten of Barnes, the former European commissioner, says that the UK government will have little say in what sort of concessions we may get the from the EU. He said;

‘There’s an awful lot in the British press about what we’ll get from them, what we’ll negotiate from them. And I think it overlooks the fact is that they’ll decide. They’ll decide and we must hope that we can get as decent a deal as possible. But it’s ultimately going to be decided in Paris and Berlin and some of the other member states.’

Impressive Retail Figures help Boost Euro

The Euro’s advance was also supported this morning as retailers reported better than expected sales in the Eurozone in November, despite a 0.9% drop in non-food products such as clothing and electronics.

Data released this morning reported that while sales dropped from 3.0% to 2.3% in November, they were notably higher than expectations of 1.9%.

The rise was largely due to growth in Germany as retail sales in the Eurozone’s largest economy recovered from a slump in October to surge from -0.8% to 3.2% in November, outpacing predictions that they would only rise to 1.2%.

EUR USD Exchange Rate Forecast: Drop in US Employment Data May Boost Euro

The EUR GBP exchange rate may rise later this afternoon following the release of the latest US employment figures as the unemployment rate is expected to rise from 4.6% to 4.7%, which may cause increased demand for the Euro thanks to EUR/USD’s status as the most traded currency pairing.

Looking forward, an expected jump in the Eurozone unemployment rate from 9.7% to 9.8% at the start of next week could drag on the single currency.

Meanwhile, the Pound is likely to continue struggling to make any significant gains as the looming threat of the beginning of formal ‘Brexit’ negotiations in just a few week hangs over the UK currency.

Current Interbank Exchange Rates

At the time of writing the EUR GBP exchange rate was trending around 0.85 and the GBP EUR exchange rate was trending around 1.16.