- Pound (GBP) eases back from €1.20
- Calls grow for Boris Johnson to resign
- Euro (EUR) rises on a weak USD
- Eurozone economic calendar light
The Pound Euro (GBP/EUR) exchange rate is edging higher after mild losses in the previous session. The pair settled -0.1% lower on Wednesday at €1.1980. At 05:45 UTC, GBP/EUR trades +0.04% at €1.1984.
The Pound came under pressure in the previous session as Prime Minister Boris Johnson came under growing pressure to resign. The Prime Minister apologized for attending a gathering at his official residence during the first lockdown in May 2020.
Leaders of the opposition have called for his resignation. Meanwhile senior ministers have rallied around the PM for now.
A leadership challenge could come if 54 of the 360 Conservatives write a letter of no confidence to the Chairman of the 1922 Committee.
The pound has remained resilient so far, helped in part by optimism surrounding the Omicron outbreak as cases continue to fall. However, political uncertainty can weigh on a currency. With no high impacting economic data to distract investors, attention will remain on the political situation in London.
The Euro rose on Tuesday thanks to a weaker US Dollar and despite a mixed bag of data from the bloc.
German wholesale prices unexpectedly fell in December to 16.1%, defying analysts’ expectations of a move higher to 17.6%. Wholesale price inflation was at 16.6% in November.
Whilst this doesn’t mark a big decline in wholesale inflation is does suggest that inflation could be finding a ceiling.
Separately Eurozone industrial production came in ahead of forecasts rising 2.3% month on month in November after falling -1.3% in October compared to the previous month, a considerable downward revision. Consensus estimates had pointed to a 0.5% increase.
Looking ahead the Eurozone economic calendar is relatively quiet. As a result, the Euro could move at the hands of the US Dollar.