EUR/GBP surges to 22-week high as UK’s political uncertainty weighs on the Pound

  • UK’s Finance Minister stays ready to resign after amid disagreement over the Prime Minster May's spending plans.
  • Tension ahead of the second round of Tory voting also weighs on the Pound.

With the British Finance Minister’s warning to resign crossing the wires, the EUR/GBP pair surges to the fresh high since mid-January before taking the rounds to 0.8970 during early Tuesday.

The UK Finance Minister Phillip Hammond announced his disagreement over the Prime Minister Theresa May’s spending plan with a warning to resign.

Uncertainty surrounding the UK PM’s race has been weighing on the British Pound (GBP) off-late. The lead runner, Boris Johnson, refrained from attending a debate with rest five candidates while some of the soft Brexit supporters gained more applause during the talks.

On the other hand, the Euro (EUR) gained after the European Central Bank’s (ECB) Governing Council member Benoit Coeure turned down fears of recession with upbeat comments during an interview with Financial Times.

While the second round of Tory voting for the rest 6 candidates may grab market attention, speeches from the ECB President Mario Draghi and Bank of England (BOE) Governor Mark Carney will also become important to observe.

The European and UK central bank leaders are scheduled to speak at the ECB’s forum on central banking in Sintra.

Technical Analysis

Mid-January high of 0.8990 holds the key to 0.9060/70 resistance-area, comprising multiple tops marked between late-December 2018 and early 2019, a break of which could further escalate the north-run towards current year’s high near 0.9120. However, overbought levels of 14-day relative strength index (RSI) indicate brighter chances of the pair’s pullback to 0.8950 immediate support ahead of highlighting 0.8900 and 21-day simple moving average (SMA) level of 0.8870.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Latest Forex News

Editors’ Picks

GBP/USD holds the lower ground below 1.2550 on downbeat UK GDP

GBP/USD stays pressured below1.2550 after flashing the biggest losses in two weeks the previous day. The UK GDP disappointed expectations by expanding 1.8% MoM in May. Focus shifts to the US CPI data. 


EUR/USD holds steady below 1.1350 amid risk-aversion

EUR/USD holds steady below 1.1350, as US dollar trades firmer amid broad risk-aversion. The German ZEW Survey to show signs of an economic turnaround. Heightened expectations for an EU fiscal stimulus plan underpin the shared currency. 


Gold: $1796 is the level to beat for the XAU bears

Gold is trying hard to recover ground above the $1800 mark, as the US dollar continues to benefit from broad risk-aversion amid looming coronavirus risks. Let’s see how it is positioned ahead of the critical US CPI release.

Gold News

Forex Today: US dollar seizes control as risk aversion returns, a busy docket ahead

Broad US dollar strength extended into Asia, as risk-averse market conditions persisted amid intensifying coronavirus fears and US-China tensions. The Asian equities followed the late sell-off on Wall Street while the US stock futures struggled with its recovery.

Read more

WTI recovers from intraday low under $40.00 ahead of API inventories

WTI’s pullback from $39.30 fails to defy a two-day losing streak. China’s sustained increase in oil imports confronts chatter of easing output cuts. US inflation data, API stockpiles and American earnings are in the spotlight.

Oil News