Earlier, the Pound Sterling had edged higher versus the Euro and struck a fresh 10-week peak, pushed higher by growing worries over Germany’s political future. After Sunday’s election, the concern is that Angela Merkel, the German Chancellor, will find difficulty in striking a deal with coalition parties who don’t share her views of Germany’s future. That resulted in heavy pressure on the Euro; the EUR/USD yesterday recorded its worst single day this year. Analysts say that that is the only reason for the Pound’s recent rise and that that is likely to be a short-lived push.
As reported at 11:10 am (BST) in London, the EUR/GBP was trading at 0.87759 Pence, down 0.27%; the pair had earlier struck a peak of 0.8800 Pence while the session low is currently at 0.87530 Pence. The GBP/USD was trading at $1.3456, down 0.04%; the pair has ranged from $1.3454 to $1.3515 in today’s trading session.
Brexit Negotiations Still a Concern
Like Germany, there is some anxiety as to the future of the British economy, especially after Theresa May disappointed investors after last Friday’s speech by not providing any solid details on the country’s negotiation position relative to trade with the European bloc. Despite investors’ sentiment, some strategists believe the speech helped to reduce risk of a possible “cliff-edge departure” in early 2019. However, they concede that, in the short term, the speech failed to pinpoint the UK’s negotiation position in the short term. Negotiations of the Brexit continue in Brussels this week.