With no real domestic data to refer to this week, pound traders have remained cautious because of speculation about the damage a no-deal Brexit could cause.
The latest warning against the UK getting a bad Brexit deal has come from Scotland’s First Minister Nicola Sturgeon, who recently met Prime Minister Theresa May in Edinburgh.
Adding her voice to others including the National Farmers Union (NFU) and the Association of Police and Crime Commissioners (APCC), Mrs Sturgeon said:
“With every day that passes, the prospect of a no deal Brexit or a Brexit with very, very little information about the future relationship seems to become more and more likely.
“Both of those outcomes would be completely unacceptable, absolutely disastrous for our economy, so I hope she can reassure me that neither of those things are going to happen.
“But if she can’t, then I hope she will outline her plan B, because we cannot simply take a step off that Brexit cliff-edge next March without knowing what comes next.”
Mrs Sturgeon went on to warn that the so-called ‘Chequers Deal’ was inadequate and that sticking to this plan would risk an undesirable Brexit outcome.
While these latest comments aren’t likely to trigger an immediate breakdown in relations between Scotland and Westminster, they still highlight growing concerns about the Brexit process.
The euro, meanwhile, has risen against the pound to reach a euro pound exchange rate of £0.898.
Euro traders have had a relatively quiet start to daily trading, with the only notable data being Spanish industrial production stats for June.
For the year-on-year reading, levels of industrial output are reported to have fallen from 1.3 per cent to 0.5 per cent; this has gone against the anticipated rise to 1.9 per cent output.
The results have had little impact on demand for the euro.
The euro could remain in the spotlight on Thursday, when the European Central Bank (ECB) releases its economic bulletin.
This might reveal an optimistic outlook among ECB officials and could lead to more impressive euro pound exchange rate gains.
Beyond tomorrow’s Eurozone data, the pound might just be able to stage a recovery on Friday if UK GDP growth rate stats show a faster pace of economic expansion.
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