- Euro Down as Deutsche Bank Shares Plummet below $10– John Cryan reassures employees over financial situation.
- Liam Fox Aggressive in ‘Brexit’ Comments – Claims that EU will have to accept free trade deal with UK.
- Nissan Seeks Compensation in Wake of ‘Brexit’ – As it faces tariffs on cars produced in the UK.
- Euro Fails to Benefit from Eurozone CPI Data – Below-Forecast Growth for September.
The GBP EUR exchange rate spiked today as the ongoing Deutsche Bank crisis crippled the Euro. Traders fear it could signal the collapse of the German banking industry and have serious repercussions for the common currency.
Euro (EUR) Declines as Deutsche Bank’s Shares Drop to 30-Year Low
Deutsche Bank shares dropped below $10 this morning to a 30-year low as the bank reeled from the loss of ten hedge funds, helping the Pound Euro exchange rate recover ground lost during yesterday’s session.
Share prices recovered slightly after an email from Deutsche Bank CEO John Cryan to employees said that ‘speculation in the media’ was ‘causing unjustified concerns’, before listing off a number of the strong fundamentals of the bank.
Rumours that the US Department of Justice would lower their fine over mis-sold mortgage bonds, from $14b to $5.4 billion, have also helped alleviate market concerns over the Euro.
Pound Higher as Fox Makes Controversial Claims that UK Will Retain Free Access to EU Post-‘Brexit’
British International Trade Secretary Liam Fox has made claimed that UK trade with the EU will remain free after ‘Brexit’, as tariffs would ‘harm the people of Europe’.
Fox says that the UK will be able to negotiate new independent trade deals upon leaving the EU and that talks have already begun with countries such as Australia.
Traders are worried about the prospects of the UK losing access to the free market, these remarks are unlikely to alter this sentiment as the majority of investors are likely to see this as more rhetoric ahead of official ‘Brexit’ negotiations.
GBP to be hit by Nissan Compensation Claim?
Nissan has warned that ‘Brexit’ threatens Britain’s vehicle manufacturing industry, as tariffs could hit UK produced cars due to the loss of access to the single market.
Nissan’s chief executive Carlos Ghosn has said that a new investment in the UK’s biggest car plant in Sunderland could be scrapped if the government refuses compensation in the case of tariffs being imposed after ‘Brexit’.
GBP EUR Exchange Rate Expected to Hold as Neither Currency Gains Edge over Data
There was positive data from the latest Eurozone Consumer Price Index (CPI) today as it saw continued growth at 0.4% in September, giving the Euro a much needed boost during the Deutsche Bank crisis.
Balancing this was the British report on the GFK consumer confidence index which saw a healthy increase to -1 from the previous month’s -7, the largest monthly rise since June 2015.
Current Exchange Rate
At the time of writing the GBP/EUR exchange rate was trending around 1.1552 and the EUR/GBP exchange rate was trending around 0.8657.