Flash data from statistics agency INSEE showed that exports rose 0.2 percent while imports edged up 0.1 percent, meaning foreign trade did not make a contribution to overall French growth. However, this did little to stop GBP/EUR plummeting to the lowest levels since September 2017. Meanwhile, further data from the bloc revealed that German consumer confidence fell for the third consecutive month. August’s GfK consumer confidence index dipped from 9.8 to 9.7, dragging the index to its lowest reading since April 2017. Commenting on the data, GfK researcher, Rolf Buerkl noted: “The trade war with the United States, ongoing Brexit discussions and the global economic slowdown continue to drive fears of a recession. The primary threat to consumer confidence is the persistently increasing fear of job losses.”
Since Boris Johnson became Prime Minister and emphasised his determination that the UK will leave the EU on the deadline with or without a deal, Sterling has lost around 2.4 per cent of its value.
The pound has also been left under pressure as there is a chance that Mr Johnson will call an early election.
The current Brexit uncertainty has caused Sterling to slump against a handful of currencies, including the US dollar, with GBP/USD plummeting to a 28-month low.
Commenting on this, foreign exchange strategist at Daiwa Securities, Yukio Ishizuki said: “No one wants to buy the pound now. The bottom has fallen out, and I’m not sure where is will stop. Uncertainty about Brexit is the main story. I don’t see how Johnson can get an agreement in place.”
Looking ahead to Wednesday morning, the euro could extend gains against the pound following the release of the German unemployment rate.
If unemployment in the bloc’s largest economy impresses, it could provide the single currency with support.