The Pound Sterling continues to trade within striking distance of a 4-month trough versus the Euro as FX traders prepare for a worsening political situation between now and the October Brexit deadline. A gauge which measures Pound volatility hit a level not seen in three years with FX traders figuring out how best to ride the political storm over the next several months. The June 7th departure of the Prime Minister is not providing any comfort to investors with likely contenders, Boris Johnson and Jeremy Hunt at opposite ends of the spectrum in terms of the Brexit negotiations. Regardless, once instilled in the Prime Minister's post, the winner will have very little time to work with Brussels toward an agreement.
As reported at 11:24 am (GMT) in London, the GBP/USD was trading at $1.2647, a loss of 0.0545% and near midpoint in the session with the low recorded at $1.2627 and the high at $1.2665. The EUR/GBP was trading at 0.882 Pence, down 0.125%; the pair is ranging from a trough of 0.88153 Pence to 0.88216 Pence in today's session.
Data Releases Weigh on Euro
Economic data released earlier today from the European Union was a mixed bag of results. In Germany, unemployment figures were slightly higher than expected in May. In France, consumer spending was unexpectedly better at 0.8%, twice the predicted 0.4% though producer and consumer inflation failed to meet expectations. Finally, in Italy, consumer and business confidence was improved in May, with readings of 111.8 and 102.0, respectively. After the data releases, the EUR/USD was trading at $1.1155, down 0.0815% and off the session trough of $1.11499.