Brexit negotiations put euro under pressure

Euro and dollar bills

The majority of global transactions are processed in these two currencies.


(Photo: Reuters)

Frankfurt The euro gave way on Friday. With regard to the negotiations on a trade agreement between the European Union (EU) and Great Britain, skepticism has grown again.

By the afternoon, the common currency had dropped to $ 1.2229. On Thursday it had reached the highest level since April 2018 at $ 1.2273. The European Central Bank (ECB) set the reference rate at 1.2259 (Thursday: 1.2246) US dollars. The dollar cost 0.8157 (0.8166) euros.

British Prime Minister Boris Johnson has appealed to the EU in relation to the tough trade talks that the union of states should come to its senses. “Our door is open, we are continuing the talks, but I have to say it looks difficult,” said Johnson in Manchester.

From the point of view of the EU negotiator Michel Barnier, there were only “a few hours” left if a Brexit trade pact was to come into force on January 1st.

The increased development not only weighed on the euro. The British pound fell against all major currencies. According to economists, Great Britain would suffer even more than the EU from an unregulated exit. In the past few days, the pound had rallied amid temporarily increased confidence.

Robust economic data from Germany did not support the euro. With the Ifo business climate, Germany’s most important economic indicator surprisingly brightened in December despite the tightened corona restrictions. Both the current situation and the prospects for the next six months were rated better by the companies surveyed.

For other major currencies, the ECB set the reference rates for one euro at 0.90828 (0.90050) British pounds, 126.69 (126.19) Japanese yen and 1.0845 (1.0821) Swiss francs.

The troy ounce of gold (31.1 grams) was trading at $ 1,883 that afternoon in London. That was about a dollar less than the day before.

More: How a weak pound could limit Brexit damage.

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