Home Forex News EUR/GBP Surges To Three-Month Highs On Brexit Concerns

EUR/GBP Surges To Three-Month Highs On Brexit Concerns

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  • Brexit Uncertainty
  • U.K-Australia Trade Deal
  • Eurozone inflation Worries

EUR/GBP edged higher at the start of the European session on Monday, as the Euro strengthened against a weaker British Pound. A rally to three-month highs comes at the backdrop of growing concerns about BREXIT uncertainty. A second-wave of coronavirus infections and its potential impact on the global economy also continued to weigh on the two currencies.

Sterling Weakness

Amid the COVID-19 uncertainty, the Euro remains resilient against the Sterling, which is on the defensive at the start of the week. The British Pound has come under pressure against the Euro in recent weeks amidst the BREXIT uncertainty compounded by the COVID-19 disruptions.

Time                            : 06-29-2020

Pivot                           : 0.9091

Technical View           : Long Above 0.9109

Target                         : 0.9114 and 0.9131

Comments                  : Weak Bullish

Last Price                    : 0.9129

Britain Prime Minister, Boris Johnson, hinting that exiting the EU without a deal and turning to Australia for a deal, is the latest development, weighing on Sterling sentiments’. The prime minister insists they are negotiating constructively but also wary of a no-deal exit that would force the U.K to look elsewhere for a trade deal.

EU Chief Negotiator, Michel Barnier, stating that the ball is in the U.Ks court, affirms how far the two are from reaching an agreement. According to the EU negotiators, the U.K faces the biggest risk on exiting the EU without a deal as it would have to contend with trade tariffs.

EUR/GBP Outlook

The Pound remains on the defensive battered by the COVID-19 disruptions. However, it has made substantial gains against other majors on the prime minister, outlining plans to ease lockdown restrictions and revitalize a struggling economy. For instance, the economy shrunk by 10.4% in April, the largest monthly fall on record.

The Eurozone is also struggling with its fair share of challenges in the aftermath of the COVID-19 disruptions. ECB policymakers insist that monetary policies’ will remain intact until the economy attains the 2% threshold and continues to weigh on Euro strength.

The release of U.K Mortgage Approvals on Monday should paint a clear picture of the U.K’s economy conversely influence EUR/GBP direction of trade. Traders also await the Germany Inflation rate’s release, likely to sway trader’s sentiments on the EUR/USD pair.

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