Pound Euro (GBP/EUR) Softens on Political Instability
The Pound Euro (GBP/EUR) exchange rate is struggling to find demand this morning in the wake of turbulent political drama.
At time of writing, the GBP/EUR exchange rate is around $1.1422, a 0.46% drop from this morning’s opening levels.
Pound (GBP) Undermined by Leadership Crisis
The Pound (GBP) is struggling for support as political uncertainty returns to the fray. In a turbulent day for politics, even for UK standards, the Home Secretary Suella Braverman was forced to resign after just 43 days in post. Braverman is the shortest-serving home secretary since 1834.
With Prime Minister Liz Truss hanging on to her position by a thread, the chaotic scenes in Westminster last night could mean her days are numbered. According to several reports, members from the 1922 Committee will be convening later today to discuss the leadership crisis. The ongoing political turmoil is unlikely to inspire much confidence in GBP investors. Veteran Tory MP Charles Walker expects Truss to resign very soon, adding:
‘It’s chaos and most of my colleagues have had enough. There may be thirty out there that still feel that somehow this shamble is recoverable. But about 330 of us have now given up all hope that the current PM can navigate her way out of this.’
Meanwhile, the cost-of-living crisis continues to weigh on both the UK economy and Sterling. A survey by Which? highlighted the struggles of UK households. 9% of all households are said to be finding it ‘very difficult to get by’, and half of those are having to skip meals.
Euro (EUR) Climbs on Energy Security Reassurances
Meanwhile, the Euro (EUR) is enjoying modest success against its peers this morning as the EU looks to coordinate with other energy suppliers to avoid an energy crisis this winter. In a statement released this morning, German Chancellor Olaf Scholz declared that Europe can free themselves from dependence on Russian gas. Scholz added:
‘At the same time we are also talking with producers about an appropriate price. I am convinced: countries like the U.S., Canada, or Norway, who stand with us on Ukraine’s side, have an interest in Europe’s energy not becoming unaffordable.’
Elsewhere, positive news out of Ukraine as military forces push towards the Russian-held city of Kherson. Ukrainian forces continue their successful counter-offensive operations and look to seize back the only regional capital Russia have controlled.
Pound Euro Exchange Rate Forecast: Political Turbulence to Unseat Truss?
Looking ahead, the Pound Euro exchange rate could see further fluctuations without a lack of major data. Ongoing political uncertainty is likely to weigh on the Pound. If pressure continues to build for Truss to be ousted, Sterling could plummet on volatility.
Meanwhile, any further developments out of Ukraine could influence the Euro. However, negative headlines could see the single currency slide.