Pound euro exchange rate: GBP/EUR sinks as global risk aversion rises

Chuka Umunna, the Liberal Democrat Treasury and Business spokesman, also warned that UK businesses were unprepared for a no-deal Brexit. Mr Umunna said: “Pursuing a no-deal Brexit is a wholly irresponsible political choice of the new administration for which there is no mandate and which will put businesses and jobs at risk.” Sterling failed to claw back its losses today despite the UK Markit Service PMI for July beating forecasts and rising from 50.2 to 51.4.

Duncan Brock, the Group Director at the Chartered Institute of Procurement and Supply, commented: “While services activity grew in July, this marginal improvement on last month is a smokescreen.”

“Fundamental weaknesses remain in a sector pinned down by Brexit uncertainty and increasingly stagnant global economic growth.”

The British currency has managed to gain on higher-risk currencies however, thanks to the upswing in risk aversion caused by the latest escalation in US/China trade tensions. 

Today also saw the publication of the Eurozone’s Markit PMI Composite for July, which held steady at 51.5.

Chris Williamson, a Chief Business Economist at IHS Markit, said: “Trade war worries, slower economic growth… and geopolitical concerns such as Brexit led the list of business woes, dragging manufacturing production lower at its fastest rate for over six years.”

“While the service sector has helped offset the manufacturing downturn, growth also edged lower among service providers in July.”

However, the Eurozone’s Sentix investor confidence index came in at -13.7 in August, down from -5/8 in July and far worse than the forecast reading of -7.0.  

The pound euro exchange rate is likely to remain subdued as Brexit negotiations between the UK and the EU show no signs of improving any time soon. 

source: express.co.uk