The common currency Euro struck a 7-month peak versus the Pound Sterling after the President of the European Central Bank suggested that the Quantitative Easing program would be reduced. Mario Draghi said yesterday that with inflation nearing the ECB’s goal then cutting the massive program would be the next logical step. That news helped the Euro bounce hard and has kept momentum positive as did the relative air of lowered political uncertainty within the Eurozone.
As reported at 11:03 am (BST) in London, the GBP/USD was trading at $1.2812, essentially flat; earlier the pair had hit a low of $1.27929 while the session peak was at $1.28346. The EUR/USD was trading at $1.1363, up 0.23%; the pair has ranged from a low of $1.13286 to a peak of $1.13890 in today’s trading session.
Sterling Pressured from All Sides
In the UK, political uncertainty and the residual effect of the Brexit have pressured the Pound Sterling, to the point that the EUR/GBP had hit a low of 0.88422 Pence. Given the latest disappointment in the UK general election, called for by the Prime Minister, there is some question as to Theresa May’s future as the PM. Additionally, the Bank of England appears split as it relates to the current low interest rate environment. Earlier, Jon Cunliffe, the BoE Deputy Governor, suggested that rates should probably remain low for the time being, an outlook touted by Governor Mark Carney. However, chief economist and voting member within the Monetary Policy Committee, Andy Haldane has said that he is considering voting in favor of a rate hike.