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Euro Pound Sterling (EUR/GBP) Exchange Rate Improves as UK House Prices Figures Fall

EUR/GBP Exchange Rate Rises as UK House Prices Fall for First Time this Year

The Euro Pound (EUR/GBP) exchange rose by 0.3% today, leaving the pairing fluctuating around £0.899.

The Pound (GBP) fell against the Euro (EUR) following the publication of the UK Rightmove house prices for July.

Monthly figures eased by -0.2%, while year-on-year figures also fell by -0.2%.

Miles Shipside, a Rightmove Director, commented on today’s figures, saying:

‘[T]he current political climate means that the crucial ingredient of confidence has been impaired, and that is causing some potential buyers and sellers to hesitate. [However with] record employment, low interest rates and good mortgage availability, buyers have a lot in their favour apart from the lack of political certainty.’

The Euro, meanwhile, showed mixed performance as many European currency traders are becoming increasingly jittery following last week’s poor German production data.

There are also increasing doubts setting in regarding the health of the Eurozone’s economy, with fears rising that the European Central Bank (ECB) could cut interest rates in the near-term.

GBP/EUR Exchange Rate Sinks as Post-Brexit Trade Concerns Increase

Sterling has remained subdued against many of its competitors today, following comments from the International Trade Secretary Liam Fox concerning likely complications surrounding Brexit.

Mr Fox said that a post-Brexit trade pact with the US would be more complicated, and take much longer, than had been anticipated by many MPs, including the Tory leadership favourite Boris Johnson.

He said:

‘One of the things you have to remember about the US is that not all trade policy is actually done at the federal government level. A great deal of the trade policy is done at the state level, particularly in the non-tariff barriers to trade, things like regulation.’

Increasing tensions between the EU and Boris Johnson are also exacerbating Brexit jitters.

As Mr Johnson is the most likely candidate for the future Prime Minister, any signs of a fall out between the potential leader and the EU are Pound-negative, for it increases the likelihood of a chaotic exit for the UK.

EUR/GBP Outlook: Sterling Could Rise on Improving Average Earnings Figures

Euro traders will be looking ahead to tomorrow’s printing of the German ZEW Survey figures for economic sentiment for July.

However, as these are not expected to improve, we’ll likely see the Euro begin to lose some of its gains against the Pound.

Mark Carney, the Governor of the Bank of England, will also be delivering a speech tomorrow, with investors paying close attention to any dovish comments about the UK’s economy.

Sterling investors, however, will also be looking ahead to tomorrow’s printing of the UK average earnings figures for May.

Tomorrow will also see the printing of the UK claimant count rate figures for June.

As both of these are expected to improve, we could see the GBP/EUR exchange rate begin to edge higher.