Update: The Pound to Euro (GBP/EUR) and Pound to US Dollar (GBP/USD) exchange rates have been trending higher on Thursday after Theresa May survived a showdown with MPs last night. May addressed the 1922 committee last night, asking for unity in a bid to save her leadership. There have been a lot of rumours recently that the Prime Minister might be facing a leadership challenge over her handling of Brexit. The GBP/USD exchange rate is trading at 1.2906, while the GBP/EUR exchange rate remains in the region of 1.1311.
The Pound to US Dollar (GBP/USD) exchange rate has been tumbling so far in Wednesday’s European session, reaching $1.2899 interbank, a six-week low. Meanwhile, the Pound to Euro (GBP/EUR) exchange rate has been in a tight range ahead of Prime Minister’s Questions.
Pound Exchange Rate Sinks to Six-Week Low
The Pound’s weakness comes after Theresa May struggled to get her cabinet onside regarding a transition deal, posing concerns that she’s going to face a battle to get it through Parliament. One of the big worries is the upcoming Conservative Party 1922 Committee. There are rumours and reports from sources close to the situation that Theresa May could be facing a disaster, with some Sunday papers reporting MPs having said May should ‘bring her own noose’. Additionally, the National Audit Office has said a no-deal Brexit could result in security problems at the UK border, and cause havoc with delays.
Meanwhile, in the US, Donald Trump is continuing on with his attack of the Federal Reserve and the Chairman he appointed, Jerome Powell.
Industry expert Craig Erlam explains:
‘Trump has been quick to point the finger of blame at the Fed, with the President desperately not wanting to be associated with a stock market sell-off in the run up to the mid-term elections. Especially when he’s spent the last two years taking credit for the colossal gains. Rising interest rates has clearly been a factor in the loss of confidence in the stock market in recent weeks, with trade wars, Brexit, Italy’s budget issues and the Khashoggi murder also being important contributing factors.’
Euro to Face Political Turbulence if Italy and European Commission go Head to Head
The Euro has its own problems to deal with. Italy’s budget has been met with a push-back from the European Commission. Since coming to power, the populist party government has said that it wants to keep using the Euro (after previous suggestions that a referendum could be on the cards). However, if the European Commission doesn’t let Italy deliver election promises, there could be some serious political turbulence ahead.
Today’s Interbank Exchange Rates – GBP/EUR, GBP/USD
The Pound to US Dollar (GBP/USD) exchange rate is trading at 1.2913. The Pound to Euro (GBP/EUR) exchange rate is trading at 1.1325.