Pound Euro Exchange Rate Bolstered by Confirmation of No-Confidence Vote
The Pound Euro (GBP/EUR) exchange rate is trending higher today as it’s hoped a vote of no confidence in Boris Johnson might help to ease UK political uncertainty.
At time of writing the GBP/EUR exchange rate is around €1.17, a half a cent higher than this morning’s opening levels.
Pound (GBP) Poised to Continue Recovery after Confidence Vote
The Pound is hoping to carry its momentum beyond the vote of no confidence in Boris Johnson’s leadership as investors are hoping for an end to the never-ending political uncertainty which has plagued Sterling in recent months.
The fallout from the ‘partygate’ scandal has bolstered criticism of Johnson from within his own party, with the threshold for holding a no confidence vote passed this morning. GBP investors are confident Johnson will win the vote, underpinning demand for Sterling today.
Amongst the many MPs vocal in their disapproval of Johnson, the UK’s ‘Anti-Corruption Champion’ John Penrose has stepped down from his role:
‘I’m sorry to have to resign as the PM’s Anti-Corruption Tsar but, after his reply last week about the Ministerial Code, it’s pretty clear he has broken it. That’s a resigning matter for me, and it should be for the PM too.’
With data thin on the ground for the rest of the week, the outcome of the confidence vote could dictate the direction of the Pound Euro exchange rate going forward.
Euro (EUR) Set to Rebound with Hawkish ECB?
The Euro (EUR) could see further fluctuations this week as the European Central Bank is set to outline its future plans monetary policy on Thursday. With investors wanting a stronger signal that the central bank is set to start raising its rates in July, such a move could lend support to the Euro.
The ongoing Russia-Ukraine crisis still weighs heavily on the Euro as Estonian Prime Minister Kaja Kallas warns that the pain of Russian sanctions will test European unity as the conflict continues. The sustained bans on Russian exports, aimed at financially crippling the Russian invasion, could start to financially cripple European countries.
With the continued energy security crisis continuing, any further negative headlines out of Ukraine could dent the Euro.
All eyes will be on the ECB interest rate decision on Thursday, and if the ECB continues its hawkish rhetoric, the single currency could be boosted.